What to Consider When Considering a Merger
Even if two organizations are in the same industry, a merger that looks good on paper might not work in practice. Consider a couple of recent examples.
Sometimes two organizations fit together like peanut butter and jelly. Other times, the mix is closer to peanut butter and Velveeta.
When you’re thinking of merging, the level of compatibility is important. A couple of recent merger stories on the association front speak to this. More details:
When a merger works: Sometimes, two organizations with similar goals might find that they’d be stronger together. Last week, two horticultural groups—OFA: The Association of Horticulture Professionals and the American Nursery and Landscape Association—announced an approved merger that was voted on by their members. The groups, which will join to become the American Horticulture Association (or AmericanHort), found their interests were well aligned. “It’s what our members want. We have surveyed our members, spoken with them, and finally asked them to cast a ballot,” said Mark Foertmeyer, the current OFA president who will become AmericanHort’s chairman. “Each time they told us they wanted a national association that unifies and serves the entire horticulture industry.” The group, which launched a website and debuted its logo to announce the change, plans to operate as a unified entity starting in January.
Sometimes, it isn’t so easy: Even when a merger makes sense on paper, organizational differences might prove too challenging to overcome. Last week at its annual meeting, UKIE, the Association for UK Interactive Entertainment, made public overtures to another British group, The Independent Games Developers Association (TIGA), seeking a closer relationship. “It just feels like we should be one, because we are a new industry,” UKIE Chairman Andy Payne explained, according to Develop Magazine. “It would be easier, for the media and politicians.” However, TIGA brushed off the proposal, saying a merger would distract the organization from its developer-focused goals. The groups previously negotiated a merger in 2011, but talks fell apart for similar reasons then, too.
Points to consider: In a 2009 piece for Associations Now, lawyer Eileen Morgan Johnson of the firm Whiteford Taylor & Preston LLP broke down the factors that might lead two associations to merge and outlined the legal issues that need to be considered before going down this road. “Whether a merger, collaboration, or other arrangement makes the most sense for your association depends on the facts and circumstances of your association,” she wrote. “Contracts, intellectual property, and corporate governance and antitrust laws are just some of the legal issues involved before the discussions even begin. Whatever course of action is chosen, legal counsel should be sought to assist in guiding your association leaders through the process.”
Have you taken part in a merger? If so, what advice would you give to other organizations considering a similar move? Let us know your take below.