As companies grow, some seek to expand even further by buying another business. Mergers and acquisitions, however, are tricky and require the expertise of well-trained lawyers and business professionals. According to the Wall Street Journal, the buying company also needs to know how to properly integrate the selling business for an effective merger to take place.

One of the most difficult problems a company can face is that its integration team does not stay the same after each merger. When a new business is bought up, there is a transition period in which an integration team should work at making the two companies operate and run as one. If the integration team changes every time a company acquires a new business, however, some of the lessons learned may be lost. New integration teams may be re-inventing the figurative wheel after each integration.

The Wall Street Journal recommends brainstorming a post-merger integration process that will remain constant after each merger. If there is a recorded methodology, it will not matter if the integration team changes after each acquisition.

It has also been reported that a lack of communication tends to make mergers and acquisitions less beneficial to a company. Often times there are two distinct teams involved in a merger and acquisition: the team that makes the deal and the team that makes the newly merged company run. The team that makes the deal has very specific ideas as to how a merger would benefit a company. They strategize and plan the priority areas of the merger and incorporate that into the deal. When that team fails to inform the operating team of its strategies and plans, however, the operation team can make some mistakes in making the newly formed company function.

Mergers and acquisitions can be extremely beneficial for both the buying and selling companies, but only if done correctly. There are numerous legal and business aspects that must be dealt with before a successful merger and acquisition can be completed.

Source: Wall Street Journal, "Expert Insight: Integration is a Key Part of Acquisition," Salil Agarwal, 12 July 2011