[Andre Council]

There seems to be a great deal of emphasis placed on Financial Due Diligence, Tax Due Diligence, etc. Should more emphasis be placed on Culture during the Due Diligence process? Is proper culture alignment a priority for purchasers or is it purely about financial gain?

[Alexandra Tóth]

In my experience decision makers adores spreadsheets because numbers are easy to argue, but you use an excel to identify a toxic culture or hidden people issues. The reality is that culture is a really important point: if the people check out or quit, the value of the acquisition can easily disappear or decline. Smart buyers are finally realizing that ignoring cultural alignment is not the right way forward.

[Lourdes Felix]

Culture should receive far more attention during the due diligence process than it often does today. Financial, legal, and tax diligence can identify risks and quantify value, but cultural misalignment can undermine even the most financially attractive transaction. Many mergers fail to achieve their expected results not because the strategic rationale was wrong, but because employees, leadership teams, and operating styles were never effectively integrated. While culture alone should not necessarily prevent a transaction from moving forward, understanding cultural differences early allows management to develop realistic integration plans and retention strategies. In my experience, culture is not separate from value creation; it is one of the factors that ultimately determines whether expected synergies are achieved.

[Mette Nymand]

I agree that culture deserves much greater attention during due diligence, not because the goal is to find a “perfect cultural fit,” but because culture is a major determinant of integration risk.

Financial, tax, and legal due diligence help answer whether the target is worth buying. Cultural due diligence helps answer how difficult it will be to realise the expected value after closing.

For example, differences in decision-making speed, leadership style, risk appetite, incentives, or customer focus may not affect the purchase price directly, but they can significantly delay integration, increase employee turnover, and reduce synergy realisation.

Rather than asking whether the cultures are similar, I believe buyers should ask:

Which cultural differences are strengths that should be preserved?
Which differences could become barriers to integration?
What actions will be needed during the first 100 days to address those risks?

The most successful acquirers identify the critical cultural gaps during due diligence and incorporate them into the integration plan, alongside the financial and operational workstreams. In that sense, culture isn’t separate from value creation, it’s one of the key drivers of whether the investment thesis is ultimately realised.

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