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How to Blend Company Cultures in a Merger

Considering an acquisition? Learn to minimize a potential blow to employees and maximize the value of existing talent.

This story appears in the April 2011 issue of Entrepreneur. Subscribe »

Q: I'm considering acquiring a competitor. What do I need to know about merging two cultures?

A: We bow to you for thinking about this issue ahead of time. Approximately 65 percent of mergers and acquisitions fail. "The No. 1 reason is a poorly planned and managed integration," says Alan J. Smith, CEO of San Francisco-based Bay Pacific Group, an M&A consulting firm. "Executives underestimate the challenge involved in successfully blending corporate cultures."

Don't believe it? Look what happened when behemoths Daimler-Benz and Chrysler tried to get together. It was called a "merger of equals," but one company always dominates, Smith says.

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