Australia: John Moore's guide to merging - Part 3: Getting to the ceremony


This is the third in a three part series on mergers and acquisitions.

In the first article we dealt with making contact, the Deed of Confidentiality so that you can secure preliminary and subsequently detailed due diligence information, the forming of an M&A Committee and a Due Diligence Committee. The second article dealt with the detailed due diligence. This article deals with phase 3 of the M&A – implementation.

Before you begin

Once a proposed M&A proceeds through due diligence and there is still a "green light" at this point, you should have started drafting your Heads of Agreement, a living document which your merger manager will update as needs be and will concern a variety of important things that you have assented to along the way. It becomes the "bible" of your M&A and keeps you on track and usually leads to the signing of formal contracts. However, be warned, the importance of a Heads of Agreement is that it guides the transaction right up until settlement day, and it is often only shortly before settlement day that the formal transaction and practice agreements are entered into. Thus the importance of recording of all of the essential agreements in a Heads of Agreement.

Having completed your detailed due diligence and settled any outstanding issues that may arise from that process, it is important to ensure that all formal contractual arrangements are put in place before the two parties merge. This includes the new entity structure agreements under which you will practice. If the two parties cannot reach agreement so that formal contracts can be signed, then you know you are facing huge problems.

Your Merger Project Team

Implementation of a merger will usually be allocated to a merger project team. The biggest mistake that can be made is forgetting that your existing finance and administration team already have full time occupations. Handing a merger project to them could be doubling or tripling their work load. Where this has been done, I have found that a merger project team can be working long hours, and on some occasions, 7 days a week, particularly if the merger implementation time frame is limited.

Your merger project team will develop a "Merger Project Plan". It will map due dates and progress notes against each topic. Relevant topics for a merger project plan comprise:

  • Merger funding/agreements.
  • Accounting
  • Accounts
  • Integration of systems
  • Agreements
  • Insurance

There can be an enormous amount of work in each of those categories. When the M&A occurs, there are: the logistics of integrating difference computer systems, acquiring new systems to cater for the new entity, training staff on new systems, moving staff from one office to another, setting up a new general ledger structure, new employee numbers, department numbers, updating the payroll, amending the budgets, updating online authorities, winding down old entities, transferring ownership of assets, setting up discrete cost centres so that goodwill "earn out" provisions can be calculated monthly, setting up any necessary discrete accounts so that you can meet the obligations under the acquisition agreement and so forth.

Issues to consider

Do you have time to carry out a thorough investigation in relation to the acquisition of new systems? Are you able to co-ordinate sufficient "buy in" by the combined staff to new systems? It can be catastrophic to buy a system that is not compatible or that is not user friendly. Mergers and acquisitions are stressful; new systems, new people, new policies and procedures all add great stress and anxiety to the newly combined workforce.

M&As are generally about people and cultural fit. You want all of your people to stay with you. You want them to work with you towards a common successful goal. You do not want people who "take the money and run". You want a combined workforce who is there for the long haul and are all committed to the success of the merged identity. Accordingly, achieving an excellent implementation means being considerate to the new workforce, especially when you are introducing new systems. When integrating systems, the cleanliness of the information being inputted is important. Bad information in leads to bad information out.

The introduction of any new system will entail upfront monetary expense, but also considerable diversion of time and resources within the whole organisation to learn about the new system. It is a very extensive undertaking. Poor planning can result in aborting new systems and that can be disastrous and be money down the drain.

Your merger project team are therefore very important and a big mistake is underestimating the extra workload that is placed upon them. That needs to be considered because you have to have the time and resources for a proper implementation. If you do not, you will "cut corners" and increase your risk of error.

You need to avoid conflicts of interest. You cannot necessarily assume conflicts can be managed. You may need to consult very closely with key clients. You therefore need an accurate client list and an appropriate analysis needs to be made.

The Merger

The newly merged entity will need a figurehead. Quite often there will be an M&A celebration. Invitations will be sent to clients. Speeches will need to be made and the correct message must be communicated. Clients, as well as your staff, are key stakeholders to the success of the organisation. No doubt you will need to project a contemporary focus towards the merger.

You will need to make important firm announcements and explain to the staff:

  • What is the news?
  • Who is the party the subject of the M&A?
  • What will be the merged firm name be?
  • What is going to change?
  • What will be the firm's structure?
  • How will the merger happen?
  • Which offices will be closed?
  • Where will be the principal place of location?
  • New contracts of employment
  • Details of any major IT upgrades and timing
  • Telephone system upgrades
  • New document management systems
  • Any new accounting systems
  • Merger retreats
  • Client function as a merged entity
  • How will the market be informed?
  • What will I say to people if I am asked about the merger?
  • Communication (regular merger newsletter)

It will be necessary to impose deadlines for staff to accept, for example, offers of employment so that the total workforce can be under consistent employments contracts. Many entities may not have written employment contracts. They may not have restraints of trade and IP protection clauses. All of this should be updated so there is consistency and fairness.

If a key player happens to be overseas at the time important merger documents have to be signed, make sure that a remaining partner is given a power of attorney to execute these documents so there is no last minute "hold up". Make sure that any key business structure documents are executed if merger settlement is to occur. If there are serious difficulties in having the final agreement signed, the merger should not proceed because, once the transaction occurs, it is usually impossible to agree on something that cannot be agreed by the due date. You then kick off your merger with a "festering unresolvable problem". Not a good way to start.

A check list of high level merger process once due diligence has given the "green light" might be as follows:

  • Merger project manager works with partners of both firms to construct a draft internal structure for the merged entity.
  • Merger committee approves internal structure.
  • Meeting of full partnership of proposed merged firm to ratify internal structure.
  • Confidential and co-ordinated announcements to all staff of both firms.
  • External announcement to the market.
  • Merger project manager/human resource managers to meet with staff of both firms as relevant.
  • Merger committee reviews list of key merger issues.
  • Merger committee agrees on proposed merger date.
  • Merger project manager prepares the draft merger project plan, human resources plan and communication plan.
  • Merger committee approves the draft merger project plan, human resources plan and communication plan.
  • Meeting of full partnership of proposed merged entity to ratify the merger project plan, human resources plan and communication plan.
  • The merger project manager proceeds to manage the merger in accordance with the ratified plan and regularly meets with the merger committee.

It is desirable, therefore, to have your high level merger process agreed in principle. The detail is documented in the merger project plan.

You will need to prepare a Client Information Memorandum to be used as a reference source when discussing the merger with clients. This would cover such topics as:

  • The merger in brief
  • Information about the entities
  • What will change?
  • What will stay the same?
  • Post merger outcomes

You will need to have prepared press releases and be prepared for interviews in industry magazines and so forth. Be prepared for the questions that will be asked.

A newer, stronger, better firm

Finally, every merger is different. Each merger implementation must be developed to the needs of each discrete merger. You cannot develop a process "off the shelf". This is because people and personalities are involved; different systems and different work practices. Like anything in life, the better the plan, the better the outcome. The better the planning, the less surprises. In short, plan your work and work your plan.

I wish you the best of luck.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions