But I am confident this combination will succeed. Donald B. Marron is chairman of UBS PaineWebber, a full-service securities firm headquartered in New York City. Merger Counseling PaineWebber's experience notwithstanding, some marriages are just made in hell. Often the expected synergies fail to surface, or become buried beneath cultural issues, lackluster due diligence, or poor integration. You lose good talent because people don't know where they stand.
Customers become confused or frustrated and become susceptible to overtures from competitors.
All your potential synergies quickly unravel. In a Towers Perrin survey of 450 HR executives, more than half identified cultural integration, or lack thereof, as a major factor in the success or failure of a merger or acquisition. Not only are you dealing with the corporate culture, you've probably got significant differences in management style, pay philosophy, language, and national culture. This was dramatically demonstrated with the DaimlerChrysler merger, where the salaries of U.S. executives were embarrassingly inflated compared to those of their German counterparts. Synergies may also be curtailed by an unexpected regulatory climate.