Higher education institutions are facing mounting pressures driven by decreasing enrollment and many other factors. As a result, mergers have become an increasingly common strategy for achieving financial stability, expanding academic offerings, and pursuing strategic growth.
Merging two universities is a complex, high-stakes exercise – and involves much more than simply combining assets. Post-merger integration requires a thoughtful alignment of visions, cultures, governance, and operations to ensure long-term success.
The stakes couldn’t be higher: failed integrations waste millions in resources, damage institutional reputations, and leave students and faculty in limbo.
The State of Higher Education: Why Mergers Matter
Higher education in the United States is currently navigating what in business is called a “mature-to-declining market.” This term, borrowed from business, describes a situation in which there is more capacity (classroom seats) than demand (students). Except for highly recognizable flagship universities, most institutions are facing significant challenges that will worsen due to three key factors:
First, competition has reached unprecedented levels. Institutions aren’t just competing with their traditional peers anymore – they’re facing new challengers from online providers, corporate training programs, alternative education models, and the corporate sector. For example, Southern New Hampshire University has well over 160,000 students. How many of those are from your state?
Second, demographics are working against us. We’re staring down what’s known as the “demographic cliff” – a sustained decline in the traditional college-aged students that will continue for at least the next decade. This isn’t a temporary dip; it’s a fundamental shift in the potential student population.
Third, costs keep rising. Yes, recent state funding has helped keep tuition increases below inflation, but that’s just slowing the bleeding – higher education remains increasingly unaffordable for many students unless they’re willing to take on considerable debt.
Over the past few years, we have seen an average of one higher education institution closing or merging with another per week. This is the reality of a mature-to-declining market. And given these dynamics, mergers have become a necessary tool for many institutions’ survival and growth in the industry.
Acquiring Institution: Strategic Drivers for Integration
In my previous articles (Merging Higher Education Institutions – Part 1: Transformation, Myths, and Barriers and Merging Higher Ed Institutions Part 2: A Smart Strategy?), we explored why institutions consider mergers. Today, let’s focus on where many mergers succeed or fail: post-merger integration.
From working with dozens of institutions, I’ve found three primary drivers pushing acquiring institutions toward mergers:
Strategic Market Expansion
Savvy acquirers don’t just chase student numbers. They’re evaluating how geographic expansion strengthens their mission. Access underserved student populations? Create new industry connections? Merging with an institution located in a different region, the acquiring institution can access new student markets, increase enrollment diversity, and attract faculty from more expansive pools. This geographic expansion can also lead to new research collaborations and partnerships. Key questions to ask include, will the new location enable us to:
- Grow our student population?
- Expand our research partnerships?
- Access underserved student populations?
- Create new industry connections?
Academic Program Enhancement
The best integrations I’ve seen create genuine academic synergies – not only expanding programmatic offerings. When a liberal arts college combines with a STEM-focused institution, it opens possibilities for innovative interdisciplinary programs that neither could offer alone, as well as attracting high-caliber faculty and students.
Operational Excellence
Another reason for merging is for reducing costs through shared services. Although this isn’t the primary reason for a merger (acquisition), the resulting cost savings of consolidating administrative departments (IT, HR, marketing, finance) ends up being a byproduct of operational excellence. Ideally, this should free up resources for enhanced student services, technological improvements, and innovative academic programs.
Keeping these strategic objectives in mind throughout the integration process ensures that the merger remains aligned with the original vision of why we wanted to acquire the institution in the first place.
Institutions Seeking Acquisition: Beyond Financial Drivers
While the acquiring institution often approaches a merger from a position of strength, an institution seeking to be acquired has reasons that go far deeper than what you would read in the newspaper. They run the gamut from financial instability to operational inefficiencies to governance struggles.
Financial strain is generally the biggest reason why institutions seek a merger (or, as some call it, a partnership). Many smaller institutions, including regional publics, find themselves caught between declining enrollment and tuition discounting, and the math no longer works.
But here is what often gets missed—there is a reason that these institutions may be good opportunities for a stronger institution—they bring valuable assets to the party. For example, they may have strong programs in specific disciplines that are attractive to an acquiring institution. They may have a unique geographic presence and dedicated faculty and staff. All these things can be useful to an institution.
Understanding the reasons the acquiree seeks to partner with another institution is essential for determining if the two institutions are a good fit. Without this synergy, the merger is less likely to succeed.
Pre-Integration Due Diligence
Once you identify an institution potentially to be acquired and you have signed the requisite letter of intent, you should begin the due diligence process to ensure there is a good strategic fit. I tell my clients that they must look well beyond financials. The areas to look at include:
- Mission alignment
- Financials
- Geographic and market positioning
- Academic programs
- Governance structures
- Culture
- Regulatory and accreditation requirements
- Physical plant and technology infrastructure
- Student support services
This is not an exhaustive list but a starting point for conducting due diligence.
While mergers are often initiated at the board and presidential level, involving faculty and other stakeholders early in the process is vital to gaining broad support for the merger.
Building Your Integration Plan
The most effective post-merger integration plans start during the due diligence phase, not after the merger is finalized. Leadership teams must anticipate challenges, set priorities, and plan for a smooth transition. If integration begins after the merger closes, it’s too late.
Key elements of an integration strategy include:
- Gaining clarity around value proposition and objectives. Institutions must be clear about the value proposition for both institutions in the merger. This goes well beyond financial and should include academic enhancement, student opportunities, and research capabilities. These benefits must be clearly understood and articulated to stakeholders.
- Setting your timeline. As a general rule, corporate mergers emphasize speed to closure and integration as speed is often the key to realizing efficiencies. However, in higher education, a “go slow to go fast” approach is often more successful, as phased implementation minimizes disruption and allows time for stakeholder buy-in. Back-office consolidation can usually happen quickly, whereas integrating the academic side should follow a more deliberate pace. Rushing the process can alienate faculty and staff, leading to resistance to change in the form of votes of no confidence or more subtle forms of pushback.
- Creating the merger team. Another very critical area is creating your integration team. Successful integration requires a dedicated merger team with clearly defined roles and responsibilities. This team oversees the integration process and ensures that every aspect of the merger is aligned with the strategic objectives. Too often, I see institutions try to manage integration as a side project for an already busy administration instead of having a dedicated team that can focus on this major undertaking. Not having a dedicated team is a recipe for failure.
- Planning the Post-Merger Integration (PMI). As trite as it sounds, you have to plan to plan. Each step of the post-merger integration process must be mapped out with accountabilities, responsibilities, and timelines. Use of a RACI model (responsible, accountable, consult, and inform) plus timelines are some of the key areas that need to be included in the plan.
Integration Models and Autonomy: Choosing Full Integration or Retained Identity?
One of the earliest and most important decisions that must be made involves institutional autonomy – how much autonomy will the acquired institution retain? Some mergers result in full integration, in which the two institutions merge all operations, branding, and governance into a single entity. In other cases, the acquiree may retain some degree of autonomy, such as keeping its own identity while benefiting from the merged institution’s shared services and financial stability.
Your autonomy choices affect:
- Academic program oversight
- Student recruitment processes
- Campus operations
- Alumni relations
- Accreditation status
- Compliance requirements
The autonomy decision generally involves weighing the benefits of integration against the desire to preserve certain aspects of the acquiree’s identity. For example, if both institutions have Colleges of Business, leadership must decide whether to combine them or allow each to remain distinct. Something that may affect naming is whether or not it one of the colleges has sold naming rights. Be sure to check any agreements along these lines to ensure you’re not going afoul of any contractual obligations.
An example of an institution retaining its identity is Willamette University’s acquisition of Pacific Northwest College of Art. PNCA retained its name, identity, and campus in Portland, and it continues to operate largely independent of Willamette.
Post-Merger Operational Integration Strategy
Every merger promises efficiencies, but achieving them requires strategic and thoughtful integration across multiple functions. Institutions must consider:
- Technology Systems. Technology integration can be one of the most challenging portions of any merger project. Both the acquiring and the acquired institutions must evaluate and integrate systems; these include the Learning Management Systems (LMS), Student Information Systems (SIS), Enterprise Resource Planning (ERP), communication platforms, and data management tools. All of these systems must align with the institution’s long-term goals and provide seamless access for students, faculty, and staff.
- Administrative Functions. These areas include financial services, human resources, marketing, communications, enrollment management, and institutional research. Institutions can significantly increase efficiency and reduce overhead costs when eliminating redundancies. I find that the most successful mergers optimize these departments by ensuring they focus on enhancing student services and supporting the academic mission.
- Academic Support Services. Last but not least, there are multiple functions that include library, academic advising, career services, student support programs, and research administration that must be integrated unless autonomy is given to the partnering institution. Again, ensuring the integrations focus on student needs and experience and support academic success is critical for building a strong foundation for student achievement and retention.
Cultural Integration: Key Considerations
University cultures frequently have deep, longstanding traditions and values and can make cultural integration complex. Rather than forcing the issue, institutions may be best advised to allow time for the cultures to align naturally through collaboration. Focus on:
- Building cross-institution teams to facilitate collaboration between faculty and staff from both institutions through joint committees, projects, and professional development programs. These collaborations help bridge cultural gaps and encourage a sense of shared purpose.
- Identifying and emphasizing shared values. Many institutions share commitments to student success, academic excellence, and community service. Highlighting these shared values can help both institutions come together under a unified mission and vision.
- Preserving valuable traditions such as significant ceremonies, rituals, and practices that hold meaning for students, alumni, and faculty. This demonstrates respect for each institution’s legacy while allowing time for natural cultural integration.
Integration Regulatory Requirements
Meeting regulatory requirements can make or break a successful merger and is often a source of delays. Early planning helps avoid problems in areas such as:
- Approval must be obtained from the institutional accrediting bodies of both institutions, as these are essential for degree recognition and maintaining federal financial aid eligibility.
- Federal and State Education Agencies. Given the new requirements for changing accreditors, institutions are strongly advised to engage the U.S. Department of Education and relevant state higher education authorities to ensure compliance with all requirements.
- Program-Specific Accreditation. For specialized programmatic accreditors (e.g., nursing, engineering, business), institutions must secure approvals from relevant accrediting bodies and licensure boards to ensure graduates’ qualifications remain recognized and respected.
Integration Execution Success Factors
The success of a post-merger integration depends on rigorous execution and attention to detail. Institutions should prioritize:
- Leadership Alignment. Develop clear decision-making protocols, hold regular executive team meetings, and implement a consistent communication strategy to ensure alignment across leadership levels.
- Stakeholder Engagement. Establish ongoing communication channels with faculty senates, student governments, staff councils, alumni associations, and community partners. Engaging these groups helps anticipate concerns and gather support.
- Progress Monitoring. Set clear milestones and metrics, regularly report on the status of integration efforts, escalate issues promptly, and ensure resources are allocated efficiently to address emerging needs.
Sustainable Post-Merger Integration Success
A successful post-merger integration doesn’t end with the completion of immediate tasks; it’s about creating lasting value through ongoing organizational alignment. It is recommended institutions commit to the following:
- Clear Strategic Vision. Define and communicate a unified vision that aligns with both institutions’ goals and serves as a guiding framework for long-term decision-making.
- Thoughtful Planning and Sustained Focus. Integration requires consistent effort and ongoing commitment from leadership. Maintain a dedicated focus on resolving challenges and aligning practices even after formal integration concludes.
- Stakeholder Engagement and Operational Excellence. Prioritize active stakeholder involvement and continuous improvement across operational functions. A unified institutional culture and efficient operations are critical to achieving the merger’s intended outcomes.
- Cultural Sensitivity. Recognize and respect the unique cultures and histories of each institution. Through patient, respectful integration, build a shared culture that honors both legacies and supports a new, collective identity.
Most importantly, remember that integration isn’t a sprint – it’s a marathon. Even after formal integration ends, you’ll continue aligning practices and building a unified culture.
