Communicating a Merger : The Emirates NBD Story
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Communicating a Merger : The Emirates NBD Story



Presentation at the "GCC Corporate Finance Conference - Capital Markets in Turbulent Times". April 2008

Presentation at the "GCC Corporate Finance Conference - Capital Markets in Turbulent Times". April 2008



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Communicating a Merger : The Emirates NBD Story Presentation Transcript

  • 1. Emirates NBD Communicating a Merger : The Emirates NBD Story Sanjay Uppal Group Chief Financial Officer Emirates NBD GCC Corporate Finance Conference Capital Markets in Turbulent Times 16 – 17 April 2008 Park Hyatt, Dubai
  • 2. Successful Organizations underscore the need for effective communications “The perseverance to repeat the same message day after day, year after year, with no end in sight, may be Welch's [CEO of GE during one of its most successful periods] greatest strength strength” Noel Tichy & Stratford Sherman “The key is to have organized that you’re constantly listening to the organization...Then you have to sum up what’s going on, clarify what’s not clear, and communicate back” Jean Pierre Garnier, SmithKline Beecham “People want direct, clear, timely and truthful communications…People need to know where the organization is going and what the future holds” Ned Barnholt, CEO Agilent Technologies Barnholt CEO, Source: Fortune book excerpt (Control Your Destiny or Someone Else Will, Noel Tichy and Stratford Sherman), January 23, 1993; Chief Executive, Summer, 2002; IABC Communications World, June/July 1993; Control Your Destiny or Someone Else Will 1
  • 3. How it all started……… 2
  • 4. A merger is a time of uncertainty and risk ….. Employees may leave Customers are worried Market / Shareholders may react negatively Competitors attack : people & business Productivity / revenues often decline …..Communication is essential to focus the organization & to help mitigate these risks 3
  • 5. Early, frequent communication following merger has impact EXAMPLE Change in mean from pre-merger benchmark Control plant – no communication until formal announcement of organizational changes Experiment plant – early, frequent communication during planning process Stress – 9% less Uncertainty – 22% less Intention to remain – 6% higher 4 5 6 4 3 3 5 Mean Mean Mean 2 2 M M M 1 0 -4 2 4 16 -4 2 4 16 -4 2 4 16 Weeks before/after merger Weeks before/after merger Weeks before/after merger Performance (self reported) – View company as trustworthy, Job satisfaction – 14% higher 20% higher honest, caring – 11% higher 3 4 4 3 2 3 Mean Mean Mean 2 -4 2 4 16 -4 2 4 16 -4 2 4 16 Weeks before/after merger Weeks before/after merger Weeks before/after merger Source: Schweiger and Dennis, Communication with employees following a merger: a longitudinal field experiment; Academy of Management Journal, Vol. 34, Nr.1, 1991; conducted research on two plants in a newly merged organization 4
  • 6. Emirates NBD merger communication timeline 7 March March – June 12 July 5 Sept 17 Sept 16 Oct Merger Valuation / Legal / Merger EBI EGM Executive ENBD Announced Due Diligence / g Terms Committee Lists on Negotiations Announced Appointed DFM (Press conference) Tradi Suspended Tradi Suspended Tradi Suspended (7-15 Oct) ing ing ing ( 13 March 2 July 1 Aug 6 Sept 26 Sept 19-22 Oct Joint Steering Merger Merger NBD EGM First Board IMF Meeting, committee terms Offer Meeting of Washington established agreed launched ENBD 5
  • 7. Communicating with all stakeholders . . . and articulated issues & our approach for d ti l t d i hf We developed our Stakeholder map. . . each stakeholder group Internal External Others Stake- Their Our Message Channels holders issues objective j Staff Shareholders General Public Press / Shareholders Value Increase Safe / Enhanced Website Investment Boards Customers Customers Service/ Competitive Larger bank, Press / Banks Pricing distribution.. Website UAE regulators Accountants Staff Job Security/ Attract and Better Intranet Career Retain best opportunities webcasts, Foreign g Outlook talent in diversified newsletters regulators Legal Advisors organisation Analysts Other Advisors Regulators Transparency/ Compliance/ Meeting Blueprint Best Practice Media Ratings agencies Suppliers 6
  • 8. Stakeholder management : Shareholders, Investors & Analysts Key Issue Issue discussed Channels Used Messenger Deal Rationale Creation of UAE champion • Press • Press Releases with scale & financial • Conference calls • Call transcripts strength to effectively • Website • compete in UAE & GCC p • One-on-one briefings g • Offer circular Management Quality Established management • Press • Press briefings expertise, best practices • Website Earnings dilution Enhanced market position, • Presentations • Conference calls leverage the distribution • Website • Offer circular networks & geographical presence of EBI & NBD Justification of Valuations, Merger terms • Press • Press briefings Premiums • Website • Offer circular Synergies Value Creation through • Presentations • Conference calls revenue and cost synergies • Website • Offer circular Roadmap Timetable of key stages • Presentations • Conference calls • Website • Offer circular 7
  • 9. Safeguard & Enhance shareholder’s interest….. 8
  • 10. Stakeholder management : Employees Key Issue Issue discussed Channels Used Messenger Attract & Retain top Greater ability to attract • Websites • Employee talent and retain talent communications • Internal broadcasts • Merger updates Redundancy Larger, diversified, • Internal broadcasts • Merger updates growing organization • Internal news letters • News letter Career Path Enhanced career • Website • Announcements opportunities, better • Internal news letter • News letter career development • Internal broadcast • Employee Q&As Training opportunities Improved training • Internal news letter • Announcements • Intranet • News letters With more informal, face-to-face communication in & around merger, the formal materials become more credible & useful among employees 9
  • 11. Communicating with our staff 10
  • 12. Stakeholder management : Regulators Key Issue Issue discussed Channels Used Messenger Transparency Valuations, Rationale • Meetings • Steering Committee • Conference • Exco • EGM Best Practices Stages of Merger Process • Written • Exco Establish blueprint for Communication • Investment Banks future mergers • Meetings • Legal Advisors Compliance Licenses, Approvals, • Written • Applications Waivers Communication • Requisitions • Meetings 11
  • 13. Launching the ‘Offer’ 12
  • 14. Shareholders approve the merger 13
  • 15. Multiple channels leveraged to ensure impact Outgoing communication Dialogue Channels / tools Channels/tools News Letters Steering committee meetings Press Releases Team meetings Media Interviews AGMs / EGMs E-Mails Shareholder dialogue Intranet Press Conferences Internet Press Interviews P I t i One-on-one meetings Informal Meetings Call Centres Intranet – “Ask the CEO” 14
  • 16. Emirates NBD is born 15
  • 17. Lessons learned What worked well What we could have done more of Centralised Communication Internal communications I t l i ti process Communicating the merger Plan, plan, plan….. process to stakeholders Setting up communication Communicating the ‘Offer’ process channels Allow more time for Arabic / Balanced / measured approach English translations E li h t l ti to communications Protected investors – suspension of trading as necessary Even if at the risk of Constant feedback over-communicating Delivered o ou p o ses e e ed on our promises 16
  • 18. Life ft th Lif after the merger…….. 17
  • 19. Merger communication never stops New Brand Group’s Vision, Mission & Values Organisation structures & model Delivering Synergies Analysts / Media : Presentations on IFRS 3 Investor Relations New HR policies Integration : Plans & updates Financial Announcements Emirates NBD’s First AGM Team building Impact of external events ... 18
  • 20. EmiratesNBD : A new beginning….. More information on 19