While I was perusing a local business periodical, I noticed a Q&A; piece with the CEO of a local organization that is participating in a merger. Well, maybe it is more of an acquisition than a merger. Nevertheless, an agreement was approved by the boards of directors of the two organizations in December. The companies’ voting members are now casting their ballots and assuming all goes as planned, the merger will be approved April 1.

The initial question for the CEO was “Why does it (the merger) make sense?” The answer was totally focused on the cost savings: “We budget, we plan and we project to save in excess of $3 million dollars annually beginning in 2011 with the merger,” the CEO said.

Cleverly, after a question concerning the timetable and whether one entity actually is absorbing the other rather than merging, the reporter inquired as to the source of the cost savings.

“Principally, the biggest one is people,” the CEO answered. Then he goes on to articulate the math and note that the current number of employees in the “acquiring” organization is 100 and in the “acquired” organization is 40. He then followed with the most astonishing remark of all: “We need to be closer to 115 (employees) in size.” Ouch.

While the CEO simply was offering his own honest rationale for the merger, the interview could have been handled differently. Guiding principles of good M&A; communications certainly would suggest an alternate approach.

The answer could’ve been (allowing for the fact the CEO put a target of $3 million in cost savings right out there from the get-go) something like the following:

“Going forward, all of our employees are important to us. Our organizations truly share the same bonds. Our missions and values are similar and rooted in the strength of our people. For cost savings, we look first to sharing the same space and same building, so we will pick up over half a million right away in lease costs. There is a million or so in IT, in our computer systems, hardware and software licenses that won’t need to be duplicated. We’ll see tremendous efficiencies in our combined administrative systems and significant opportunities to reduce travel costs. We are also confident our employees will come up with some additional economies in their respective departments to help us hit our target.”

Enough said.

Throughout a merger or acquisition, publicly, hold all of your employees in high regard and your company’s reputation will follow suit.