5 Steps To Merger Success

As a credit union leader, you should always have your eye on the competition. In today’s aggressive market, it’s not always just about making your credit union better than the rest; knowing who your greatest competitors are can also help you identify potential merger partners who will bolster your growth plan.

It goes without saying that the merger process can be a pretty complicated undertaking, but with professional guidance early on, the foundation will be laid for an optimal merger when the time comes.

To break it down into simpler terms, think about the merger process in five subcategories. An infographic entitled The Five Most Important Steps in a Successful Merger helps to clarify and simplify the process, which is comprised of the following steps:

1. Develop Your Strategy. Start from the beginning.

What’s your vision for your credit union community? Consider Everyone your organization touches, including members, employees, and your board members.

Where should you look? Keeping your community in mind, what are the demographics, location, cultural attributes, and product demand elements that will provide your people with a fruitful future down the road?

Every credit union needs a growth plan, and a prosperous financial institution always begins with a solid strategy.

2. Choose Your Partner. It’s important to broaden your horizons and select several potential merger partners. Although one or two may fit your ideal situation better than others, it is always important to keep your options open.

You may find yourself considering several dozen targets. To keep them organized, categorize them by using a three-tiered system:

• Primary
• Secondary
• Tertiary

Using a third-party facilitator, reach out to your target credit unions anonymously to gauge their interest.

3. Build the Bridge. Now you’ve reached the part of the merger process when it’s time for leaders to meet. Either CEO should be able to facilitate a meeting of the credit unions’ leaders. A designated executive or industry consultant may also take on this task.

At the meeting, everyone will share their opinions and concerns as the negotiation process gets underway. After everyone’s voices have been heard, and a mediator has facilitated the discussions, you’ll develop a letter of intent to join forces to build a strong credit union together.

4. The Legalese. It’s essential to develop the right team who can help take you to the finish line. Consultants, key staff members, and attorneys can provide input to facilitate the conversations.

5. Close and Integrate. Shake hands, and seal the deal. You did it!

As complicated as the merger process can be, it’s much simpler when you have proper guidance. There are industry experts who have built their own companies around making sure credit unions like yours achieve optimal growth and success in the future.