European Experiences in University Mergers              Mergers - processes                  and pitfalls                 ...
University of Edinburgh                            Income: £650m; €800m                            Students: 29,000       ...
Mergers are:   Complicated – the unexpected    occurs   A massive change management    challenge   An emotional experie...
Merger ProcessEarly Thinking                                               Decision        Heads of       Agreement       ...
Early Thinking• Why do you want to merger? – link to institutional  strategy? – what are success criteria?      research e...
What sort of merger?Org A           Org A+B           Org BOrg A            Org A            Org B                    Org ...
Early Thinking• Why do you want to merger? – link to institutional  strategy? – what are success criteria?      research e...
Heads of Agreement / MoU• Outline shape of the merger – sort out the business  matters• Needs formal agreement from govern...
Governance - Structure                              Government /  Governing body /           Funding Body etc             ...
Governance - Understanding and             Communication• Project Definition Document (jointly agreed)• Explain merger pha...
Due DiligenceThe aim of Due Diligence is to• gather the information needed to understand the  operations and performance o...
Due DiligenceIdentify Steering Group(s) – Academic/Professional Services;Brief managers (both organisations);Provide Check...
Vision & Business Case          Document to be produced:          • Vision reasons for merger,          • Academic & other...
LegalsStatutory Merger• Legal merger undertaken through Legislation• Must operate strictly within the term of the legislat...
NegotiationStatutory Merger• Negotiation with other institution• Negotiate with government/funding bodies       Funding of...
Transition PlanningIdentify Steering Group(s) – Academic/Professional Services;Plan            Communicate                ...
Transition ImplementationLaunch ImplementationPre merger date actions• systems set up (e.g. payroll);• statutory notificat...
EmbeddingSettle in people and new ways of workingComplete post merger project actionsMove to “ business as usual” as soon ...
It’s all about people • Emotional roller coaster • More than communication,   communication, communication • Need engageme...
nigel.paul@ed.ac.uk
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Mergers - processes and pitfalls

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A Universidade Técnica de Lisboa (UTL) promoveu a 8 de março, no Auditório Lagoa Branca do Instituto Superior de Agronomia (ISA), da Universidade Técnica de Lisboa (UTL), o workshop «A Fusão entre Universidades: Experiências Europeias», que contou com a presença de vários especialistas de renome internacional nesta temática entre eles o Dr. Nigel Paul, Diretor dos Corporate Services, Universidade de Edimburgo, Reino Unido, que proferiu a palestra "Mergers - processes and pitfalls".

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Mergers - processes and pitfalls

  1. 1. European Experiences in University Mergers Mergers - processes and pitfalls Nigel Paul Director of Corporate Services 8 March 2012
  2. 2. University of Edinburgh Income: £650m; €800m Students: 29,000 Staff: 11,000 (8000 FTE) Campuses: 7 World Ranking 20 (QS)Recent Mergers:Research Unit Research Unit Whole institution
  3. 3. Mergers are: Complicated – the unexpected occurs A massive change management challenge An emotional experience Require tenacity Some problems will exist whether merger takes place or not
  4. 4. Merger ProcessEarly Thinking Decision Heads of Agreement Governance Due Diligence Business Case Negotiation Legal Transition Planning | Implementation Embedding
  5. 5. Early Thinking• Why do you want to merger? – link to institutional strategy? – what are success criteria? research enhancement; student growth/experience; enhanced global competition; political pressure; cost reduction ; link with private sector• Who are the targets? – what relationships do you want to cultivate before you start talking about merger?• What sort of merger? equivalent size; equivalent strength; large/small; strong/weak• What is the future of the heads of institution /governing bodies?• What is the rate of change you want to undertake? immediately on merger / later
  6. 6. What sort of merger?Org A Org A+B Org BOrg A Org A Org B Org BOrg A Org A Org B Part B Part B
  7. 7. Early Thinking• Why do you want to merger? – link to institutional strategy? – what are success criteria? research enhancement; student growth/experience; enhanced global competition; political pressure; cost reduction ; link with private sector• Who are the targets? – what relationships do you want to cultivate before you start talking about merger?• What sort of merger? equivalent size; equivalent strength; large/small; strong/weak• What is the future of the heads of institution /governing bodies?• What is the rate of change you want to undertake? immediately on merger / later
  8. 8. Heads of Agreement / MoU• Outline shape of the merger – sort out the business matters• Needs formal agreement from governing bodies of parties involved• Sets framework for subsequent discussions• Cover as much as you can on the big issues, otherwise detailed negotiations become more difficult• Will normally include: Aims & Objectives; Governance and organisation; Finances & Funding; Employment; Services; Intellectual Property; Liabilities & Indemnities; Publications/branding; Confidentiality
  9. 9. Governance - Structure Government / Governing body / Funding Body etc Governing body / structure structure Joint Steering Steering Group Board Steering Group DD Group DD Group Negotiation Team Negotiation Team Legal Team Legal Team Implementation Dedicated Dedicated Implementation Group Project Resource Project Resource Group Post Post Implementation Staff Unions Implementation Mgt / Oversight Mgt / Oversight Student UnionsAcademic | Professional Academic | Professional Services Alumni Services
  10. 10. Governance - Understanding and Communication• Project Definition Document (jointly agreed)• Explain merger phases / processes• Websites / Blogs• Regular meetings – on agendas in committees• Leadership capabilities / team building
  11. 11. Due DiligenceThe aim of Due Diligence is to• gather the information needed to understand the operations and performance of the other institution• identify the risks and issues that will need to be addressedsuch that• a workable deal structure can be put in place,• legal contacts/instruments for the transfer of the business and assets appropriately deal with the key issues• effective planning for implementation of the merger can take place.
  12. 12. Due DiligenceIdentify Steering Group(s) – Academic/Professional Services;Brief managers (both organisations);Provide Checklist;Managers to provide DD report;Review Reports and extract main issues • Finance HR • Procurement Property & Environment • ICT, Library & Heritage Assets • Research Grants & Consultancy Intellectual Property • Health and Safety Residences & Services • Student Administration / Services Academic Support • Legal and Compliance • Subsidiary Companies
  13. 13. Vision & Business Case Document to be produced: • Vision reasons for merger, • Academic & other Benefits • Financial Costs/Benefits • Implementation plans / risks Submission to Government / Funding Bodies Used for public consultation
  14. 14. LegalsStatutory Merger• Legal merger undertaken through Legislation• Must operate strictly within the term of the legislation• Work closely with government lawyers• Usually everything transfers including historic liabilitiesContractual Merger• Legal merger undertaken though contract(s) Purchase and Sale Agreement, Property, Technology Transfer etc• Consider whether better to transfer a legal entity or a staff/business activity• Cover every aspect of merger – links with negotiation• Take specialist legal advice
  15. 15. NegotiationStatutory Merger• Negotiation with other institution• Negotiate with government/funding bodies Funding of merger; property changes; staffing changesContractual Merger• Negotiate with other parties & gov’t/funding bodies Value of organisation being transferred; funding of merger; future income; property changes; staffing changes; staff terms and conditions; residual liabilities (pension funds / environmental liabilities; warranties• Conflict of Interest – those in unit being transferred should not be part of negotiationNegotiating Remit – Tactics – leader / escalation
  16. 16. Transition PlanningIdentify Steering Group(s) – Academic/Professional Services;Plan Communicate ActionDetermine new high level organisationBrief managers (both organisations) to develop detailed organisation proposals, implementation plans and staffing requirements • • Academic Structure Teaching/Assessment Timetables Academic Support • Finance HR • Procurement Property & Environment • ICT, Library & Heritage Assets • Research Grants & Consultancy Intellectual Property • Health and Safety Residences & Services • Student Administration / Services Subsidiary CompaniesDetermining which member of staff goes into which role in new organisation –permanent roles / transition rolesProcess for communicating role to staffProcesses for communicating with Staff UnionsProcess for consulting with students and merging Student Unions
  17. 17. Transition ImplementationLaunch ImplementationPre merger date actions• systems set up (e.g. payroll);• statutory notifications;• training in new systems/processesActions on/following merger date• welcome activities,• data transfers between systems,• operation of new systems/processes/structures
  18. 18. EmbeddingSettle in people and new ways of workingComplete post merger project actionsMove to “ business as usual” as soon as possibleTeam building / culture developmentLots of communication – groups / individualsPost merger review(s)
  19. 19. It’s all about people • Emotional roller coaster • More than communication, communication, communication • Need engagement, involvement, challenge, recognition • Active influencing • Provide support for those struggling Optimism, Excitement, Enthusiasm, Hope Pessimism, Worried, Denial, Panic,
  20. 20. nigel.paul@ed.ac.uk

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