The Growing Role of Mergers in Higher Ed

At a Glance

Demographic realities are leading more colleges to consider joining forces. Inside Higher Ed's new special report, The Growing Role of Mergers in Higher Ed, provides an in-depth and practical guide for campus leaders so they can explore such combinations and learn why they have worked for some institutions and not for others. Download a free preview of the report.

Topics Include

• An in-depth look at the data and projections causing leaders to worry about the future of their institutions
• A framework around which leaders can build their own merger process
• A step-by-step guide for higher ed leaders and trustees on evaluating and pursuing a merger
• Case studies examining colleges that have successfully merged -- and some that have tried and failed
• Stumbling blocks to avoid, including how to communicate with accreditors and faculty, on the path to successful merger

Executive Summary

Colleges and universities find themselves facing an uncertain future as student populations shift, financial pressures mount and skepticism rises about the value of a higher education. In the coming years, presidents and boards of trustees may very well find themselves fighting for the survival of their institutions -- if they aren’t already.

Smart leaders do more than hope to keep their heads above water. They seek strategies to navigate the coming waves, or to improve their position if they are already confident in their course.

One such strategy is merger.

Mergers and acquisitions carry a stigma in higher education, where every college professes a fierce dedication to its own unique mission and the barriers to major institutional change seem dauntingly high. Concerns about preserving mission, dealing with faculty members, pleasing alumni and overcoming a culture that has long encouraged silence about problems can make the idea of pursuing a merger seem like an insurmountable challenge.

But talking about a merger doesn’t guarantee a battle between constituencies on campus. Nor does it amount to a betrayal of an institution’s identity.

A well-thought-out merger process can help presidents, boards, faculty members, students and staff members understand where a college stands and where it must go in order to preserve its mission and values into the future. Such a process can be successful even if it does not result in a consummated merger. It can help leaders choose from a range of actions: perhaps a strategic partnership with another college that doesn’t quite amount to a full merger, or maybe a specific plan for trimming expenses and refocusing student recruitment.

Without assuming a merger is the best strategy for every institution, this report aims to serve as a guide for considering the strategy. To address practical concerns, it sketches out a basic framework around which leaders can build their own merger process, and it includes sidebars on important stumbling blocks such as approaching accreditors and talking to faculty. To answer the question of why any college would consider merging, it explores the data and projections that cause leaders to worry about the future of their institutions. For those who want to learn from others’ experience, it features several case studies examining colleges that have successfully merged -- and looking at some that have tried and failed.

The point is not that any institution should or should not merge with another. It is that colleges and universities of all types and sizes could benefit from asking the question “Should we merge?” and then answering it calmly and strategically.

Table of Contents

Executive Summary

Introduction: A Tale of Two Mergers

     At a Glance: What’s in a Label?

Why Mergers Matter Today

     Grim Projections

     Who Is Merging

     At a Glance: Why Haven’t We Seen More Mergers?

The 2018 Tale of Two Massachusetts Mergers

     Wheelock’s Process

     Mount Ida’s Process

     What the Acquirers Saw

Anatomy of a Merger

     Prepare Internally

     Find Partners

     Perform Due Diligence

     Sign a Nonbinding Memorandum of Understanding

     Sign an Agreement

     Put the Agreement Into Effect

     Key Considerations: The Faculty Role

     Key Considerations: The Legal Aspects

     Key Considerations: When to Talk to Accreditors

     Key Considerations: The Human Element

     Key Considerations: Checking With the Feds

When It Works

     Berklee College of Music and Boston Conservatory

     George Washington’s Growth

     Case Study: Going the Distance

     At a Glance: What’s Out West?

Things Fall Apart

     An Unfinished Deal in Upstate New York

     Fordham Folds a Women’s College

     Disagreements Decades in the Making

Institution Type Matters

     How Public Mergers Are Different

     Case Study: A Public and Private Say No

     Deals With For-Profits

Weighing the Costs and the Benefits

What’s the Alternative?

Additional Reading

About the Author: Rick Seltzer, special projects editor, covers business and management for Inside Higher Ed. He joined the publication in 2016 after working as a money and general-assignment reporter for The Baltimore Business Journal. Previously, he was a business reporter for The Bloomington Herald-Times, and he covered small business and health care for the Central New York Business Journal. Rick, a native of south central Pennsylvania, started his career as a local beat reporter for The Harrisburg Patriot-News. He graduated from Syracuse University in 2008 after interning at the Patriot-News and The Syracuse Post-Standard.

Number of Pages: 87 (9.5MB PDF)

Date Released: June 21, 2018

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