Post-Merger Integration: How IBM and Lotus Work Together

868 WordsFeb 3, 20183 Pages
Post-Merger Integration How I.B.M and Lotus Work Together Q1.In examining the origin of deal, what factors increased the risk of post-acquisition would be complex & result will be difficult to achieve? There were many factors that increased the risk that the post-acquisition organization would be overly complex. One such factor is the speed in which the acquisition took place. IBM did not hesitate in the slightest to acquire Lotus. Rather they paid a significant market premium for the company to ensure that they could gain control in an expedited manner. IBM tendered and all cash offer of $64 dollars a share which accumulated to the largest software buyout in history. However, the speed in which the deal occurred would have generally added a great deal of confusion to both organizations. Therefore there was little time to engage with the employees and include a level of understanding from the human capital (Peterson & Voules, N.d.). Furthermore, the speed of the acquisition also could have led to a vast amount of "brain drain". That is the top executives may have not gone along with the deal or stayed on as employees of the new combined organization. If brain drain did occur this could have set back the acquisition considerably. Without the buy in of some of the top management it would have been difficult to preserve the Lotus culture and continue successful operations through the deal. In fact, the Lotus CEO, Mr. Manzi, did leave the company despite the IBM chief
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