1.

Following are top 3 three reasons why most of acquisition fail to create value for its
shareholders

 Companies invest capital in companies to acquire them but they fail to make an effort to
have a common culture or common process – Companies often when invest capital in
another capital and push their thought to another company and further lack to understand
the importance of reaching to common process or common culture which leads to no
clarity why such merger has been done. It is very important to reach to common culture,
vision, company future plans, this helps to have better clarity in the minds of everyone
and consequently help to achieve the goals.
 Lack of clarity and execution of the integration process – Companies than often fail to do
post merge integration in acquiring company which lead to lack of clarity. It is important
to have un-biased assessment to identify key employees, crucial projects and products,
sensitive processes, policies, challenges.
 Not able to accept the good things of acquiring company and trying to change everything
– When a company acquire a new company they often try to change each and every small
process of another company and fail to understand that there could be some best practices
in the organization, and this lead to a situation of chaos in acquiring company and
employees fail to understand the reasons of such changes which lead to negative
performance and therefore such changes fail to deliver the results expected

2. Five major components of “CEMEX Way” are following:

 Efficiently manage the global knowledge base

 Identify and disseminate best practices
 Standardized business process
 Implement key information and internet based technologies
 Foster innovation

The reason why this approach been so successful in post-acquisition integration is because it
cover each and every process change which is a requisite for the successful integration.
Firstly it starts with using global knowledge base which simply means is using the global
best practices are producing results in other country so that the new company can also benefit
from those practices, further in a new company this helps to identify current best practices of
the organization and use them for better results as they may know how to get the work done
at ground level by using some process, and next standardized rest of business process to
achieve same quality results in the organization which company are achieving in other
member companies. Implement key information in new company and promote creativity and
innovation which lead to better solution are ways how such process helps to do a better post-
merger execution

3. I think companies can learn how important it is to launch best practices and standardizing
throughout by showing a concerned effort to learn the new practices from the acquiring
company and implementing them wherever required, else standardizing rest of current
practices to get the quality result is known as a “CEMEX Way” where standardizing
business process, technology and structure while allowing the acquiring companies to
have flexibility so that they are able to meet the ground objectives. Further companies
can learn the importance of continuous improvement, it’s not that once you have
launched and standardized the practices, work is done, looking at how those practices can
still be improved is way to achieve the desired results. Finally companies can also learn
to identify key talent who knows how to implement such changes in the new companies,
who may have done such change in their home company and can now share the
experience with new company, such of kind people are best people for train and can
advocate companies process to acquiring company as they already have gone through the
process once in their home country, this helps in identifying smalls key issues in a new
companies as well