Doing M&A right: How do you create a new company culture?


Three CFOs shared their insights into integrating company cultures after an acquisition and merger at Finance Indaba.

There are many reasons that companies merge with or acquire other companies – most of them are financial and include increased market share, and diversifying a product portfolio. But what is often overlooked in the process, is the union of company cultures and the effect culture will have on business going forward.

The three CFOs in the Finance Indaba session, “Doing M&A right: The winning recipe for culture”, were from different sectors – fintech, mining and FMCG – but their experiences with integrating and creating new company cultures were very similar.

Grant Minicom, group CFO at Adumo, a fintech company that specialises in payment processes, says between 2018 and 2022, Adumo went through five M&As. In retrospect, he says as part of the change management process he would focus on the culture much earlier in the process, in future. “Culture is not something that a finance department takes into account during an M&A but I have learnt that it is such a critical component of the business. Company culture can make or break your business and it is something you need to focus on at the outset and not react to it,” he says.

One of Grant’s biggest insights came when he moved two similar businesses with vastly different cultures into one building. “We had to go back to the drawing board because from a financial point of view there were synergies, but from a cultural point of view it was like putting together a group of people from Sandton and another group of people from Fourways together – they are different.”

To address the cultural differences, Grant says a new culture had to be created. “We took people from all levels of the business offsite to design a new culture. We listened to TED Talks on culture and looked at the cultures of fintech businesses overseas for examples on what we wanted to emulate. Then together as a team, we built a culture and spent a lot of time explaining it and entrenching it into the business,” he explains.

Walter Leonhardt, financial director for Coca-Cola Beverages South Africa, says that in 2016, six entities, some large and some smaller family businesses, came together to form what is now Coca-Cola Beverages South Africa. One of the most important lessons he says he has learnt is that clarity, communication and consistency are key.

“Culture differences are important to get our minds around, but I have seen that things that are mechanistic and process driven are not done in enough detail and then loosely referred to as ‘culture differences’. It’s important to be clear and specific with people about how things should be done. If you bring people together to devise, structure and document new ways of working, your success rate will be a lot higher.

“Be careful about labelling something as culture difference when in fact there was not enough specificity. I have experience in this and after digging, found that people have their own ways of doing things and I wasn’t specific about how they should do things. You need to give one-on-one time to get people over the line. And you may find that you or your managers spend a lot of time on this, but it is important,” he explains.

Imraan Osman, CFO at Siyanda Bakgatla Platinum, says that what he has learnt about creating a new culture, since his organisation took over Union Mine in 2018, is that it is a journey and not a destination. “We took over 6,000 employees at Union Mine and there was a lot of despondency, so we spent millions on change management and introducing a new culture. But at the end of the day, what I have seen is that the fundamentals of any company culture lie in transparency, candidness and empowerment. People want to feel like they are being heard and that they matter – and ultimately, that is what culture must address.

“There will always be naysayers and people who have a negative perception of the company, but the goal is to keep working on the culture. There shouldn’t be an end goal.”

Walter says introducing a new culture takes time and is not something that will take place overnight. “We only started feeling like one entity three or four years after the merger. We had to constantly work at building and reinforcing our new culture.”

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