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Issues in carve out Issues in carve out Document Transcript

  • FOCUS TRENDS IN POSTMERGER INTEGRATION III Special Issues in PMIDealing with Carve-Outs, Unions, and Other Challenges
  • The Boston Consulting Group (BCG) is a global manage-ment consulting firm and the world’s leading advisor onbusiness strategy. We partner with clients in all sectorsand regions to identify their highest-value opportunities,address their most critical challenges, and transform theirbusinesses. Our customized approach combines deep in-sight into the dynamics of companies and markets withclose collaboration at all levels of the client organization.This ensures that our clients achieve sustainable compet-itive advantage, build more capable organizations, andsecure lasting results. Founded in 1963, BCG is a privatecompany with 66 offices in 38 countries. For more infor-mation, please visit www.bcg.com.
  • Special Issues in PMI Dealing with Carve-Outs, Unions, and Other ChallengesE very postmerger of transactions—from an integration business will or will not be trans- integration (PMI) is as perspective for the acquirer and ferred? How should the interaction different as the two from a marketing point of view for between the two parties be managed companies involved in the seller—is that carve-outs are to enable the buyer to prepare for the process. But as we often neglected assets, underfunded the transfer without violatingdiscussed in the first two reports in and underresourced. In some cases, regulatory laws? For example, whichour series on PMI, the differences are important elements of the spun-off data should be open to all and whichprimarily a question of degree, business—such as research and data should be available only in arather than of substance, and can be development, information technol- so-called clean room environmentaddressed by employing a common ogy (IT), and key personnel—might that is physically and electronicallystrategic framework.1 not even be included in the sale. isolated from both buyer and seller? And what access will the buyer haveNevertheless, there are several How can an acquirer assess and to executives with critical relevantspecial issues in PMI that demand integrate a potentially weak and expertise who will not be transfer-particular attention. This Focus incomplete business whose value ring with the asset?report, the third in our series on PMI, might be dependent on its parentaddresses four of these issues: company’s internal synergies? And These and other issues that requirecarving out value from spinoffs, how can a seller optimize its value detailed legal clarification canworking productively with unions, from the sale of such an asset? overwhelm acquirers, delayingrising to the challenges of rapidly integration for months. To avoid thisdeveloping economies, and putting For the buyer, there are four main pitfall, an acquirer should appoint ancustomers—and growth—at the challenges, all surmountable yet all independent go-between to workheart of a PMI. requiring systematic planning and with the two parties’ legal teams in execution: minimizing time-consum- developing and managing processesCarving Out Value ing legal bottlenecks; preparing for a for dealing with day-to-day andfrom Spinoffs rapid, well-planned integration; strategic issues, including fielding ensuring a smooth, well-supported and coordinating data requests.Companies are increasingly spinning transfer; and retaining and recruitingoff parts of their business, known as key personnel. (See Exhibit 1.) Preparing for a Rapid, Well-carve-outs, either to sharpen their Planned Integration. Preintegrationstrategic focus or to gain regulatory Minimizing Time-Consuming analysis and planning are prerequi-approval for a separate deal. In some Legal Bottlenecks. The legalsectors, carve-outs account for up to complexities of carve-outs are much25 percent of the value of all mergers greater than those of traditional 1. See Powering Up for PMI: Making the Right Strategic Choices, BCG Focus, June 2007, andand acquisitions (M&A). But one of mergers in which an entire company Thinking Laterally in PMI: Optimizing Func-the main difficulties with these types is purchased. Which exact parts of a tional Synergies, BCG Focus, January 2008.Special Issues in PMI 1
  • Exhibit 1. Surmounting the Four Main Carve-Out provided by the seller, such as sales Challenges Requires Systematic Planning and Execution support, as well as arrangements for sharing and transferring revenues Key Action Benefits and services over time. Initially, the Challenge seller should operate the business as Minimizing time- Appoint an ◊ Limit legal and process bottlenecks usual and then gradually hand over ◊ Manage data transfer between buyer consuming legal independent and seller parts of the business at agreed bottlenecks go-between ◊ Expand access to target management points. Regular, systematic communi- cation between both parties is vital ◊ Collect and analyze target data ahead throughout the transition and should Preparing for a of closing rapid, well-planned Establish a be a condition of the TSA. clean team ◊ Accelerate integration across functions integration ◊ Realize short-term synergies faster Retaining and Recruiting Key ◊ Ensure temporary coverage of key Personnel. The human resources Ensuring a smooth, Create a transition functions by seller during integration challenges of a carve-out should well-supported service (for example, in sales or IT) transfer agreement ◊ Create “breathing space” to build never be underestimated. Buyers infrastructure need to painstakingly plan and budget for these challenges well in ◊ Proactively retain key staff Retaining and ◊ Identify resources required to fill advance, including designing an Manage retention recruiting key and recruiting functional gaps organizational structure for the personnel ◊ Track hiring results to ensure coverage acquired business. Critical questions from day one that buyers need to ask include the Source: BCG analysis. following: Which personnel will be central to the success of the acquisi- tion? And where will there besites for the success of any PMI. But Ensuring a Smooth, Well-Support- functional gaps that need to be filledthey are even more critical when ed Transfer. After a carve-out deal is by recruiting new employees?dealing with a carve-out. First, the finalized, but before the asset isasset is likely to be distressed and transferred, the acquirer needs both Retaining key employees can bewill probably deteriorate further “breathing space” and the active sup- particularly problematic in carve-without rapid integration and proper port of the seller in order to build outs. This is partly because mostfunding and resourcing. Second, the necessary infrastructure for the carve-outs have a history of beingseller will have little incentive to asset. This support is especially underfunded, and many staff willhelp the acquirer build up a fact base important for nontraditional carve- already have been scouting forabout the spun-off business after the outs, or “amputations,” which may alternative jobs: the seeds of doubtdeal is closed. lack major core functions such as about the business’s future will procurement and marketing. already have been sown. It isLong before a transaction is final- essential that buyers address theseized, the acquirer needs to set up a The two parties should draw up a concerns by stressing forthcomingclean team to analyze the target’s comprehensive transition service investments and healthy prospects indata in a secure, confidential agreement (TSA) to ensure sufficient face-to-face meetings with keyenvironment and to prepare an support for a smooth transfer. personnel. Buyers should also utilizeinitial integration plan.2 The clean retention bonuses and other devicesteam should identify potential The TSA should detail the type and to secure essential personnel.synergies, together with strengths level of support that the seller willand weaknesses of the target, and it provide, by function and location,should draw up a prioritized plan for during different stages of the transi- 2. See the first report in this series, Powering Up for PMI: Making the Right Strategic Choices,integrating the critical functions of tion period. The TSA should include BCG Focus, June 2007, for a detailed discus-the two entities. reporting requirements for services sion of clean teams.2 The Boston Consulting Group
  • Hiring staff to create or fill missing complemented by the asset and if Regardless of the regulatory condi-or incomplete functions can also be the asset is worth at least half the tions, the golden rule is to communi-a significant task. One major con- value of the acquirer. cate openly and honestly with thesumer-goods company, which unions at the earliest possibleacquired a leading brand as a Working Productively moment. Such communication iscarve-out, had to recruit more than with Unions essential not only to remove uncer-200 people across a variety of tainty—and the risk of industrial orfunctions, from brand management Trade union membership might be job action—but also to create ato sales. It is critical to start the in decline, but it is estimated that favorable climate for negotiating.recruiting process early, supported between one-fifth and one-quarter Involving the unions as “partners”by a detailed plan, a budget, job of the world’s labor force, excluding from the outset, with the support ofspecifications, and systems to agriculture, still belong to unions— confidentiality agreements, alsomonitor progress weekly. Buyers equivalent to more than 300 million minimizes the risk of competitivelyshould also anticipate and address people. Although the intensity of valuable information leaking out topotential obstacles to recruiting staff, unionization is higher in the public the press.including out-of-cycle business- sector and varies substantially byschool recruiting and unattractive country and industry, the fact Inevitably, the unions’ principalgeographic locations. remains that unions can still play a concern will be any intended layoffs. significant role in PMI in many As soon as the number of potentialBut what about the seller? How can deals. Handled incorrectly, buyers’ redundancies is known, the acquirera seller optimize the value from a negotiations with unions can delay must inform the unions—not justbusiness unit that it intends to spin an integration for months, create about the scale of expected layoffsoff? Recent BCG research indicates labor unrest, and (in some coun- but also about its “social strategy”that most sellers produce substan- tries) even result in criminal pros- for dealing with any head-counttially lower shareholder returns from ecutions. Successful negotiations reduction. One major retailercarve-outs than they do from selling depend on three factors: communi- successfully announced that it wouldan entire company. To extract the cating openly and honestly, employ- not lay off any employees but wouldmaximum value from a carve-out, ing creative approaches to reducing offer generous compensation tocompanies need to do more than labor costs, and filling key positions those who voluntarily chose to leave.prepare a business plan and valua- sensitively. Another company, a bank, ensuredtion, supported by data from all swift integration by agreeing tofunctions; sellers also have to put Communicating Openly and create individualized plans—includ-together a compelling equity story. Honestly. The optimum game plan ing retraining and opportunities to for dealing with unions will depend relocate to other parts of the busi-The equity story should clearly spell on the regulatory environment. In ness—for employees who wouldout the attractiveness of the business heavily regulated labor markets— otherwise lose their positions in theand its market, as well as opportuni- such as France, Germany, and merger.ties for buyers to create additional Italy—there are well-defined legalvalue—for example, through processes for consulting with unions Employing Creative Approachesrestructuring and entering adjacent that must be adhered to strictly. For to Reducing Labor Costs. Threemarkets. All claims should be megamergers, involving hundreds of main issues need to be taken intosupported by data and transparent legal entities, these processes can account when devising a socialforecasting assumptions. A priori- make integration unavoidably strategy for layoffs. First, the acquirertized list of prospective buyers complex and time consuming. In less has to accept that speed comes at ashould also be drawn up. BCG regulated markets, such as the cost: the deeper and quicker theresearch suggests that sellers can United States, the legal maze might reduction in head count, the highermaximize their shareholder value be less daunting, but unions in the price unions will demand—bothfrom spinoffs if they target firms certain sectors can still exert a in terms of compensation for theirwhose core business would be considerable influence. members who lose their jobs and forSpecial Issues in PMI 3
  • those who retain their positions (for Exhibit 2. Termination Is Just One of Four Ways to Reduceexample, through more generous Labor Costsholiday entitlements). Second, thepackage of incentives offered to ◊ Reduction of working hourspromote voluntary departure from and overtime ◊ Sabbaticalsthe company must be easy for the ◊ Part-time work ( job sharing) ◊ Flextimeunions to sell to their members. The ◊ Bonuses 1 Time ◊ Nonwage benefitspackage should include immediate ◊ Pension plans ◊ Basic compensationgains—financial and nonfinancial— ◊ Hiring freeze 2 Compensation ◊ Internalization ofas well as long-term incentives. subcontracted activitiesFinally, the principles of the social ◊ Redeploying staff to other parts of the company or groupstrategy, which should be formulated ◊ Resale of 3 Head countlong before the merger is announced, activity ◊ Outsourcingshould be clearly communicated to ◊ Early retirementthe unions, employees, and the ◊ Severancemarket as a whole. One of the advan- Expected 4 Termination labortages of broadcasting the social reduction Increasing difficulty1strategy as widely as possible is that Source: BCG analysis.it will put pressure on the unions, 1 This exhibit reflects a general trend, which varies by country.especially from employees, to arriveat a solution as rapidly as possible. example, acquirers must consult with Rising to the ChallengesAcquirers should also recognize that work councils before making any of Rapidly Developinglayoffs are not the only way to cut appointments below board level. Economieslabor costs. In fact, there are three Failure to do so can lead to criminaladditional ways to cut such costs, prosecution against the CEO, which Many companies have struggled witheach of which should be used: re- has happened. The danger is that cross-border acquisitions in rapidlythinking the time employees spend any delay in announcing pivotal developing economies (RDEs) suchworking, assessing the components appointments can lead to defections as China, India, and Russia. However,of compensation, and considering of star players, destabilizing the a recent BCG study found that the“soft” measures to control head organization. biggest challenge in RDEs is notcount. (See Exhibit 2.) extracting synergies during the Depending on the country, there are integration but understanding,For example, on the time front, labor various ways to overcome this managing, and accepting the fullcosts can be reduced by introducing difficulty. One solution might be to spectrum of risks before the transac-shorter working hours, part-time announce important personnel as tion is completed.3work ( job sharing), and flextime. leaders of specific PMI-relatedDifferent elements of compensation, projects—everyone will understand Based on a survey of executives withincluding bonuses, can also be what is being communicated. Other extensive M&A experience in 30adjusted. Soft head-count measures approaches include holding private RDEs, our study revealed that 69might include hiring freezes and one-on-one discussions with key percent of executives considered theredeploying staff to other parts of personnel or simply announcing that challenges of realizing synergiesthe company or group. everyone will have a role but that it similar to those in developed will take time to finalize the posi- markets, with just 31 percentFilling Key Positions Sensitively. tions. As with so many other issues claiming PMI was somewhat moreDealing with nominations of indi- when managing PMI in a unionizedviduals for key posts in strongly country, progress ultimately depends 3. See Eyes Wide Open: Managing the Risks ofregulated markets is a more chal- on communication—and, thus, on Acquisitions in Rapidly Developing Economies,lenging issue. In Germany, for building trust. BCG Focus, January 2008.4 The Boston Consulting Group
  • difficult in RDEs. Instead, executives best practices: “Some people tional consumer-goods company.said that the principal difficulties in perceived the processes and proce- “Staff also still wear the acquiredthese markets are gaining appropri- dures as inefficient and time con- company’s uniform, reinforcing theate information to assess the target’s suming.” company’s unique identity.”risks and potential (cited by 68percent of our sample) and regula- The primary factor for success in Realizing That the West Doesn’ttory hurdles (cited by 63 percent of these situations is not to impose one Always Know Best. It is equallyexecutives). Other predeal stumbling culture on another. Instead, the ac- critical not to assume always that theblocks include limited deal structure quirer should map out the potential “West knows best.” “The key tooptions and the target’s lack of points of cultural conflict before the successful acquisitions is having anfamiliarity with the M&A process. transaction is completed and then open mind and being able to learn deal swiftly yet sensitively with them from the acquired companies,” saidSuccessfully meeting the challenges once the transaction is legally closed, one M&A veteran participating inof PMI in RDEs requires understand- clearly spelling out the new rules of the survey. “In our case, we learneding and dealing with cultural com- play. This might include making business practices that we couldplexities, realizing that the West quick symbolic gestures to demon- export to other developing marketsdoesn’t always know best, and focus- strate that the target’s core values— and, in some instances, even to ouring on growth over cost reduction. which often reflect local values—will developed markets.” Another be respected and upheld. More often executive commented: “You have toUnderstanding and Dealing with than not, local values and culture are approach it as a merger of equals.Cultural Complexities. Although a significant reason for making the Both organizations should systemati-PMI is generally considered no more acquisition. “We decided to design cally evaluate each other’s processesdifficult in RDEs than in developed the new office as it was under the and learn from each other.”markets, the challenges are not the previous owner to show we weresame. Not surprisingly, the top committed to Indonesian values,” People issues also need to beobstacle to successful integration in said an executive with a multina- managed carefully. In mergers inan RDE, cited by 83 percent of execu-tives in our survey, is managing the Exhibit 3. The Biggest PMI Challenge in RDEs Is Dealingcultural differences between the with Cultural Differencesacquirer and the target. (See Exhibit3.) Cultural differences play an What are the biggest postdeal challenges in RDEs?important role in all PMIs, regardlessof the geographic location of the Cultural differences 83deal, but these differences assumemuch greater significance—and People issues 72require much greater sensitivity—inRDEs, where mindsets can be Transferring best practices 50radically different from those in Adapting a global strategy 28developed economies. This is and business modelespecially true in RDEs that have Managing relationships with 11only recently opened their doors to distributors and suppliersforeign investment or in which there Regulatory challenges 6are distinctly different value systems.One executive singled out the Other 11problems in “changing the mindset 0 50 100[of the target’s management] from Percentage of responses‘production’ to ‘sales and market- Source: BCG survey. Note: The numbers total more than 100 percent because the participants in our survey wereing.’” Others said that it was difficult invited to provide multiple responses to this question.to get the target to accept WesternSpecial Issues in PMI 5
  • RDEs, the target, not the acquirer, performance-related salaries and cannot drive long-term sustainableusually has the greater local exper- stock options, which are still rela- shareholder value. Only customerstise, and this expertise is often tively rare incentives in many RDEs. can. Everything is driven by custom-concentrated in the hands of a ers—or, more specifically, by profit-limited number of people—typically Focusing on growth also gives the able growth. And to unlock thethe owner and a few senior manag- acquirer greater flexibility during the growth potential of customers,ers. It is essential to approach these integration because there will be less acquirers need to place their custom-individuals early on in order to urgency to deliver cost savings. In ers center stage and pursue them asconvince them of the opportunities fact, care should be taken not to systematically as they do costahead and assure them of their destabilize growth. New IT systems synergies, especially in noncommod-continued role in the business. and procurement processes, for itized sectors where customerRetaining top talent is particularly example, should be approached relationships are critical for long-important in RDEs because the gradually, and overzealous cost- term growth. (See Exhibit 4.)demand for high-quality employees reduction initiatives—especially inoften outstrips supply. customer-facing and sales func- Putting customers—and growth—at tions—should be avoided. One major the heart of a PMI requires taking“Having a local CEO who knows the consumer-goods company, for five main steps: planning for growthmarket well is also important,” said example, chose not to lay off any before a deal is finalized; creating aone executive. Another claimed that staff for up to 12 months and instead dedicated customer-focus team;it is equally vital that the senior concentrated on increasing market understanding customers’ expecta-team speak the local language. share. It was a smart tactic—growth tions, concerns, and aspirations;“When the business language of the from increased market share more preparing a coordinated customeracquired company is different and than compensated for any cost plan for day one; and taking regulartop managers do not converse in the savings that could have been made. customer pulse checks.local language, it can make gainingcredibility and trust a big challenge.” Putting Customers—and Planning for Growth Before a Deal Growth—at the Heart of Is Finalized. Growth rarely comesFocusing on Growth Over Cost a PMI naturally—it has to be planned.Reduction. Above all, the acquirer Before a deal is closed, the cleanneeds to keep its sights firmly fixed One of Ford Motor Company’s most team should work closely with bothon growth and ensure the right team celebrated advertising slogans was companies’ sales and product teamsand priorities are in place to support “Everything we do is driven by you.”growth. One of the biggest pitfalls in Unfortunately, this sentiment—nota- Exhibit 4. There AreRDEs, where many companies are bly that the customer is king—is Five Keys to Unlockingenjoying double-digit growth, is rarely evident during an integration. Customer Growthapproaching PMI from a traditional, Although most acquirers claim thatWestern cost-reduction mentality. To their deals are in the best interests of ◊ Design PMI to capture new customer opportunitiesavoid this risk and optimize returns, their customers, the practical realityit is essential to select senior mem- is that PMI is usually dominated by a ◊ Establish a customer focus team to plan, coordinate, and implementbers of the integration team who relentless quest to release cost all customer-oriented initiativeshave a solid track record of promot- synergies. Customers tend to be during a PMIing growth—even if this means treated as an afterthought. ◊ Solicit direct customer feedback as a key input into PMI decisionsbringing people on board who haverelatively little PMI experience. If Yes, cost synergies are important, not ◊ Work toward customer-growth and cost-reduction targets with thehigh-growth talent is not readily least to help cover the cost of the same rigoravailable within the acquirer’s transaction. They also provide quick ◊ Make customers central to allmanagement team, local managers wins, signaling to investors that aspects of PMIneed to be motivated to deliver progress is being made. But cost Source: BCG analysis.growth—for example, by introducing savings have a logical limit—they6 The Boston Consulting Group
  • to identify white spaces and cross- Understanding Customers’ Expec- Taking Regular Customer Pulseselling opportunities, as well as tations, Concerns, and Aspirations. Checks. Soliciting regular feedbackproduct overlaps and price differen- Gaining detailed, firsthand insights from customers not only enables antials that could undermine the into the issues that are uppermost in acquirer to enhance its strategy butcombined entity’s sales and revenue. customers’ minds is essential not also ensures that customers feel thatBased on these insights, the acquirer only to crafting an appropriate they are where they should be—atshould develop a provisional action plan but also to developing a the center of the combined entity’sbusiness continuity and growth plan. communications package that growth plans. Regular surveys shouldThe plan should include a realistic presses the right buttons. To provide be conducted to ascertain customers’yet ambitious growth target and these insights, the acquirer should perceptions of the combined entity’sproposals for addressing at-risk interview a representative cross service level, speed of response, andcustomers where there are product section of major customers from product quality, among other issues.overlaps. A dashboard for monitor- different regions in order to identifying customers throughout the their concerns about, expectations Thinking Ahead to StayPMI—categorized by their relative of, and aspirations for the newly Aheadrisks and opportunities—should also merged entity. Questions shouldbe developed. include the following: Which Integrations are complex, and special capabilities, and which specific issues such as carve-outs, workingCreating a Dedicated Customer- members of the team, do customers productively with unions, and otherFocus Team. A dedicated customer- want the combined entity to retain? challenges discussed in this reportfocus team should be established How can the quality of the service only add to the complexity. There arealongside the main project-manage- and products be improved? What do proven PMI tools to manage thesement office, which serves at the core customers fear most from the challenges. But once an integration isof any PMI. The team’s primary role merger? What hopes do they hold under way, the success or failure ofshould be to ensure that all decisions about the transaction? How can the any PMI ultimately hinges on themade during the integration are in combined entity support customers’ strategic and tactical choices madethe customers’ interests or, at the growth and innovation plans? before an M&A is legally finalized, asvery least, have a neutral impact on we have stressed in this series ofcustomers. All decisions should be Preparing a Coordinated Custom- reports on PMI.vetted by the customer focus team. er Plan for Day One. Sales and customer service teams must be These choices have to be rooted in aOne of the advantages of this ap- prepared to market the benefits of a detailed analysis of the challengesproach is that it instills a “customer merger to customers and to calm any and opportunities. Above all, thefirst” mentality in the newly merged concerns. Before a deal is closed, chosen path forward needs to beentity. It also provides staff with a regional workshops should be held rigorously and systematicallypositive counterbalance to the often with these teams to agree on the mapped out well in advance in orderrelentless and dispiriting drumbeat main messages for customers, to for the combined entity to hit theof cost reductions. In addition to prepare the top ten FAQs and ground running and to release costacting as the “customers’ con- answers, and to devise plans for and growth synergies as rapidly asscience,” the team should be respon- managing and growing customer possible. Thinking ahead is the onlysible for planning, coordinating, and accounts. Particular attention should way to stay ahead.implementing all customer-oriented be paid to high-risk and priorityinitiatives during the PMI—which customers, using customer maps to With the possibility of a recessionincludes analyzing opportunities and document relationships with looming on the horizon—makingthreats, conducting customer surveys, customers; their buying criteria, bid every synergy cent count—thedeveloping day-one action plans for histories, and outlooks; their busi- importance of pre-PMI preparationthe sales and marketing teams, and ness and competitive environment; will become more crucial than ever.monitoring progress in executing and perceived risks from the mergerthese initiatives. accompanied by an action plan.Special Issues in PMI 7
  • About the Authors Acknowledgments For Further ContactJean-Michel Caye is a partner and The authors would like to thank the BCG’s Corporate Developmentmanaging director in the Paris office following members of BCG’s writing, practice sponsored this report.of The Boston Consulting Group. editorial, and production team:You may contact him by email at Barry Adler, Katherine Andrews, For inquiries about the Corporatecaye.jean-michel@bcg.com. Gary Callahan, Keith Conlon, Angela Development practice, please contact DiBattista, Kim Friedman, Pamela the practice’s global leader:Heiko Franken is a partner Gilfond, and Sara Strassenreiter.and managing director in the Daniel Stelterfirm’s Hamburg office. You may Senior Partner and Managing Directorcontact him by e-mail at BCG Berlinfranken.heiko@bcg.com. stelter.daniel@bcg.comDaniel Friedman is a partner For inquiries about PMI, pleaseand managing director in BCG’s contact BCG’s global leader for PMI:Los Angeles office and sectorleader of PMI for the Americas. Peter StrüvenYou may contact him by e-mail at Senior Partner and Managing Directorfriedman.daniel@bcg.com. BCG Munich strueven.peter@bcg.comJeff Gell is a partner and managingdirector in the firm’s Chicago officeand global sector coleader of M&A.You may contact him by e-mail atgell.jeff@bcg.com.Jeff Hill is a partner and managingdirector in BCG’s Los Angeles office.You may contact him by e-mail athill.jeff@bcg.com.Dinesh Khanna is a principal inthe firm’s Singapore office. Youmay contact him by e-mail atkhanna.dinesh@bcg.com.Peter Strüven is a senior partnerand managing director in BCG’sMunich office and global leader ofPMI. You may contact him by e-mailat strueven.peter@bcg.com.8 The Boston Consulting Group
  • For a complete list of BCG publications and information about how to obtain copies, please visit our Web site atwww.bcg.com/publications.To receive future publications in electronic form about this topic or others, please visit our subscription Web site atwww.bcg.com/subscribe.© The Boston Consulting Group, Inc. 2008. All rights reserved.6/08
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