Managing change in EU cross border mergers and acquisitions: A critical analysis

Managing change in EU cross-border mergers and acquisitions
A Critical Analysis
IN ORDER TO SURVIVE in the
present highly competitive and
continuously growing business
environment undoubtedly
successful management of
change remains highly crucial.
Mergers and Acquisitions just as
strategic alliances and joint
ventures, have become a
growing trend amongst trans-
global organisations in recent
times, and managing this
change process successfully
remains critical to the
organisations ability to achieve its long term goals.
There are various reasons which companies have
used to support the deployment of these types of
strategy and some of the most recently identified
include (a) “the opportunity to share resources
that neither organisation by itself has”; and (b)
“The opportunity to improve cost-effectiveness by
reducing redundancies” (Burke 2002).
The inevitability of this occurrence becomes more
apparent where the merger occurs between two
trans-national organisations that are similar in
scope and of a relative equal size. However, in
some instances of such as mergers and
acquisitions there is also the likelihood of failure,
and this holds true going by what has been
revealed by leaders of merged and and acquiring
companies in analysis of the objectives of their
decision to merge (Burke 2002).
The poor success rates and the failures
that have been recorded from studies
conducted on a wide range of inter-
organisational relations have concluded
that the following conditions or
circumstances were responsible;
 lack of clear goals and actionable
indicators to measure the progress of
goals;
 inequality in the level of expertise,
prestige, status between the merging
parties;
discrepancy in power sharing and
control between the merged parties;
the lack of plan “B”;
Success on the other hand, has been
attributed to some of the following;
 the ability for both parties to create mutual
gain;
 creating a proper balance of expertise, power
and status;
 committed leadership to achieve equity.
European Cross Border Analysis
Cross border merger and acquisitions within the
European continent, has been on the rise in the
last ten years, especially with the growth of the
European Union and the subsequent opening of
the Euro Zone. This has resulted in a boom in
sectors such as financial services, manufacturing,
energy, etc. Cross border retail banking has
increased, the since the introduction of the Euro
on 1st January 1999, with eight financial services
mergers valued at above $3bn having involved a
European domiciled retail banking firm. Similarly,
was the emergence of the merger of KLM and Air
France (Deloitte 2005). The introduction of the Euro
has paved way for an unprecedented rise in
By Jeuel John
CEO|Liberty Duron
Jeuel John
Jeuel John
energypolicylab
drjeuel #energypolicylab

2 | energypolicylab | April 2016
Managing change in EU cross-border mergers and acquisitions: A Critical Analysis
consolidation and integration of amongst many of
these trans-national corporations. The principal
force behind these mergers, is the pressing need
to increase earnings in an environment where
organic growth is seldom found. Economies of
scale have now become even more realisable,
shareholder value creation, operational high
efficiency and a combination of eroding barriers
and increasing economic pressure has led to this
surge in cross-border mergers and acquisitions.
AirFrance-KLM,
France/Netherlands
Incorporated in 1919 in the
Netherlands as a public limited
liability company, Koninklijke
Luchtvaart Maatschappij also
known by its trade name KLM1
has been the foremost Dutch
national carrier. Likewise, Air
France2 which was
incorporated in 1933 through a
merger of four local airlines,3 has
been the French national carrier
and one of Europe’s leading
airlines, with flights to major destinations in nearly
100 countries in the world. In April 2004, after
receiving necessary approvals Air France4 moved
quickly to launch a public offer that would
exchange all existing ordinary equity shares of KLM
with the offer successful, the takeover was
achieved in just over two weeks giving birth to the
world’s biggest airline under the holding company
Air France-KLM5.
At various levels the rationale behind Air France-
KLM merger could not be over emphasized even
as critics termed it unique. It came at a time when
KLM was facing financial difficulties and Air
France6 looking to expand its flight network7. Air
France approached the “acquisition” of KLM
cautiously taking into consideration its previous
experience and choose not only to respect the
corporate culture of other companies but also
placing much emphasis on the mutual and crucial
benefits which both entities stood to gain terming
it a “combination” where both companies would
retain their brands by flying in their planes in their
respective colours and names. These synergies
worked by ensuring that the takeover process was
not seen as voracious but a rather friendly
acquisition with shared core values. With KLM
having failed in its strategic alliance with Alitalia
and a botched merger with British Airways,8 this
approach was necessary to ensure that by
“combination” rather than absorption, KLM and
Air France would continue to
operate autonomously under
the holding company,
therefore, preserving the
corporate cultures and identities
of both airlines and their
national policies.
In forming the executive
committee of the new group
during the integration process,
great care was taken to ensure
that both entities did not feel like the corporate
culture of the other was being enforced on them,9
something KLM and Air France would rather avert.
Integral to the change process was making sure
that the various work streams were selectively
included based on their operational efficiency,10
thereby, ensuring few redundancies by
redistributing resources across both entities to
create synergies and work efficiency jointly11.
Lessons Learned
The manner in which Air France approached the
‘combination’ in itself is a major lesson, as the
merger created a single group composed of a
holding company and two airline subsidiaries – Air
France and KLM – which have kept their own
identities (Air France 2008). According to Peter
THE INTRODUCTION OF
THE EURO HAS PAVED WAY
FOR AN UNPRECEDENTED
RISE IN CONSOLIDATION
AND INTEGRATION OF
AMONGST MANY OF THESE
TRANS-NATIONAL
CORPORATIONS.

Hartman “The disadvantages of giving up our
identity would outweigh the advantages and
certainly do not intend to let that name, that
identity12 simply disappear. neither will Air France”
(KLM., 2007). This strategically chosen acquisition
vision which was focused on shared values,
respect for corporate differences and operational
autonomy has resulted in a group with a mutual
respect for the diverse corporate culture that
range from inconsequential differences to
fundamental facets of managerial culture.
Executives from both companies accentuate that,
consolidating and being part of the alliance was
in fact a step in the right direction, in the words of
Jean-Cyril Spinetta13 the CEO of Air France the
success of the Air France-KLM merger was largely
down to Leo van Wijk14 (CEO of KLM Dutch Airlines)
and himself sharing the same vision on the future
of the industry (Spinetta 2006).
The exploitation of synergies was a major
motivating factor for Air France’s unique
approach of choosing to leverage on the fact
that size would allow them leverage on cost
savings from manufacturers. While deciding not to
cut jobs as it would not be beneficial to growth
and the rationalization and homogenization of all
operational aspects was integral to capitalising
the complimentary networks and hub to the
mutual benefit of both Air France-KLM15.
Success Factors
The success of this merger came at a price that all
parties were willing to sacrifice and pay, this
included the introduction of various programmes
aimed at introducing and developing
understanding between the two corporate
cultures by ensuring the hands-on familiarization of
both organizations which in effect at the same
time extended greater security throughout the
group. Exchange programmes such as
‘Connecting our Talents’ involving the transfer of
18 young managers across both airlines has been
introduced to facilitate the improvement of in-
depth understanding of the partner airline. The
introduction of intercultural training workshops and
language courses aimed at optimizing teamwork
has also been attended jointly by mixed Air France
and KLM teams.
Impress, Netherlands/UK
Impress came into existence in 1997 after a
successful merger between the German company
Schmalbach- Lubeca and French company
Pechiney with Schmalbach- Lubeca having run
Metal Can making operations since the 19th
Century. The company has grown to become a
global market leader in the metal packaging
industry over the last decade 16 by consolidating
and making strategic acquisitions across the
world.17 With each acquisition allowing Impress to
inch closer to its customers by strengthening
capacity18. Recently acquired Amcor already
serves major blue-chip international companies
such as Heinz, Nestle, Reckitt Benckiser and
Unilever (Impress 2007). With the UK food can
industry being the second largest in Europe,
Impress took advantage of Alcan’s19 decision to
sell its food and beverage packaging operations
as part of its restructuring plans to strategically
position itself within the UK market.
Lessons Learned
Impress has grown to become the second largest
supplier of heat-processed food cans, dry foods
can and cans for paints coatings and aerosols.
Impress has been able to achieve this by adopting
the strategy of extending geographical coverage
while staying focused on their core metal
packaging markets. In all its acquisitions Impress
facilitates integration by creating enough flexibility
through the adoption of a ‘learning by doing’
structure. This flexible structure allows the culture of
the company which Impress acquires and the
country where it operates to influence its core

values and corporate culture. At the end of each
acquisition devotes time with the acquired
company in effective communication at all levels
therefore finding the right balance between two
important ideologies, risk minimization and listening
and learning.
The risk of failure is minimized by defining success
criteria in advance, all parties need to understand
what they are looking for and be very concrete
and specific about what it looks like and this is
because success according to Conner and Meyer
(2004), is not defined merely by installing the
applications, acquiring the products or signing the
merger agreement. It is critical that the change
objectives are realized after the merger without
necessarily making people feel that they are
being forced to do something strange, hence, it
must be a well-articulated, visible and
participative goal to be successful. In taking time
to study and understand the local culture, Impress
adopted an approach of active participation
which has clearly worked in most organizations
that have undergone a change process. By
focusing on achieving synergies between both
organizations rather than introduce changes that
do not necessarily have any impact on the
business. Actively involving managers from both
entities to visit, study and learn how things are
being done in both Impress site and at acquired
site is critical to the success of the acquisition
strategy adopted by Impress20.
Success Factors
1. Critical to Impress’s success is the fact that they
have clearly defined strategy and goals from the
onset of every acquisition.
2. They invest a lot of time in background study of
the local content as well as carrying good
feasibility studies.
3. Involving the other party as much as they can in
the acquisition process, understanding that the
biggest variable are people. This was evident in
the acquisition of Heinz USA StarKist can making
facilities on Terminal Island by Impress in 2000,
which was under intense competition from other
plants both locally and overseas. Impress
introduced a 5S Lean Manufacturing program with
the aim of developing the staff in the knowledge
of value added and non-value added systems
and processes, employees now have a better
working knowledge of cross functional teamwork,
scrap has been reduced while productivity has
increased with low finished goods inventory
(CMTC 2008). The plant performance has since
increased therefore elevating its status to the
second best performing plant.
Schneider Electric, France/USA
Schneider Electric is a French-based multinational
involved in the manufacturing, distribution and
sales of electrical of products as well as of
industrial control and automation devices with an
annual turnover of €13.8bn and a market
capitalization of about €16bn and having
operations in 130 countries (PWC 2004). Through its
most attractive partner and subsidiary MGE UPS
Systems S.A.21 which it acquired in December 2003
it has become a world leader in the supply of UPS
devices. More recently the company also
acquired American Power Conversion
Corporation (APC) who are involved in designing,
producing and selling power protection devices
and accessories for IT and communications
related systems, UPS in particular. The acquisition
of these businesses with substantial rebound
growth potential has enabled Schneider Electric
to consolidate and reposition itself strategically
within the secured power industry. It was found to
be complimentary rather than competitive as
both companies were active supplier in the UPS
devices market22. Schneider Electric has deployed
mergers and acquisition as a tool in its long term

growth strategy which is primarily focused on
value creation23.
Lessons Learned
Schneider Electric is a long term growth driver with
its main goal to expand product line and
geographic coverage, the company embarks on
an intense screening process by performing due
diligence involving all parties24 which its executives
describe as the most vital phase as it helps
Schneider to understand the culture of their
potential target and the potential synergies in their
acquisition thereby developing a detailed
integration plan25. This goes a great length in
ensuring that its strategic
acquisitions create value and
offers excellent returns.
Tantamount to the other
companies in this case study
is the fact that acquisition by
Schneider is only based on
the target being in line with
Schneider’s overall strategy
rather than business
opportunity26. The project
acquisition team ensures that
both parties are actively
involved in the entire process from the beginning
by agreeing on the goals and actions, sharing
similar vision on synergies, convergence,
turnaround and future development is strictly
adhered.
Success Factors
The strategy of intense scrutiny and screening has
been credited to the critical factor in Schneider
Electric’s success in these acquisitions thereby
making room for easy and quick integration.
Schneider also makes sure that the underlying
factor in all its acquisition is communicating the
change process effectively to the new employees
by outlining the processes that will take place
including any need for redundancies. Schneider
Electric defines and outlines its integration plans of
the target company in particular management
structures and employees understanding that
“individuals at different levels and different roles
within the organization will react to change in
various ways” including customers, suppliers and
shareholders (Atkinson 2005). Though it may take
up to 2 years for the target company to integrate
Schneider undertakes an evaluation and review to
ensure the business case is valid and being
executed and if there is any deviation to keep the
managers informed.
Danske Bank–National
Irish Bank,
Denmark/Ireland
In the last 20 years Danske Bank27
has been a leading bank in the
Scandinavian financial markets as
well as being the largest bank in
Denmark, Norway and Sweden28, it
has grown to become regional
giant in Northern Europe with
divestments and subsidiaries in the
Baltic’s, Finland and Ireland. With a
damaged brand and a reputation of financial
scandals rocking the very banking ethics upon
which strong brands are built National Irish Bank
which was owned by National Australia Bank was
failing in its promise to deliver shareholder return
and create value in comparison to its competitors.
Low staff morale as well as modern IT infrastructure
was lacking coupled with poor liquidity meant the
bank needed a complete overhaul to restore
confidence amongst its customers. In December
2004, Danske Bank sought to further strengthen its
position in Northern Europe by announcing that it
had signed an agreement with National Australia
Bank for the purchase of National Irish Bank29 in the
Republic of Ireland and by the 28th of February
THE RISK OF FAILURE IS
MINIMIZED BY DEFINING
SUCCESS CRITERIA IN
ADVANCE. ALL PARTIES
NEED TO UNDERSTAND
WHAT THEY ARE LOOKING
FOR AND BE VERY
CONCRETE AND SPECIFIC
ABOUT WHAT IT LOOKS LIKE.

2005 the deal was complete for a total sum of
€1.5bn.
Lessons Learned and Success
Factors
Understanding that its market share globally was
small even though it was a leading bank in
Denmark, Danske Bank has strategically used
mergers and acquisitions to increase its synergies
and global volumes. The acquisition of National
Irish Bank has saw major turnaround in the banks
turnover and profits as well as expansion in
network of branches thereby attracting a younger
workforce and reducing staff turnover30.
According to Andrew Healy, CEO, National Irish
Bank said “as part of Danske Bank Group, National
Irish Bank is now the highest-rated full service bank
in Ireland. We believe that we’re in an excellent
position to take competitive advantage of the
current environment. We have very good
momentum in our business” (Finfacts 2008).
In seeking to readjust its strategies around its core
competences by growing into different markets,
Danske Bank’s strategy was to consolidate its retail
banking position by expanding into Irish markets.
This led the bank to develop a set of HR policies,
financial practices and strategies that could be
imported into any economy and implemented in
the banks that acquired. In addition to this was the
development of common information technology
(IT) platform and set of regulations which are in
practice in those countries to be used by all
acquisitions.
1. Integral to the success of the acquisition was
the training of staff in the use modern IT
equipment. This was facilitated by equipping
employees with laptops and making significant
investment in training and technology which also
included compulsory e-learning modules to be
completed from home. This has led to an increase
in job satisfaction and security and would not
have been achieved without constantly engaging
with the union and a strategic focus on
communication.
2. Danske made sure that by working with the Irish
Bank Officials Association (IBOA) they were able to
communicate effectively with the banks
employees while also liaising with the banks
shareholders. This was credited to being critical to
the success of the merger as it enabled the bank
to openly communicate its vision, goals and
priorities to the IBOA and its union members31
thereby gaining their trust and sincere
participation by engaging in the change process.
Santander–Abbey, Spain/UK
Born out of an initial merger between Santander
and Central Hispanoamericano banks, Grupo
Santander32 has grown to become the largest
public company in Spain33, the biggest bank in the
Euro zone, and the fourth-largest bank in Europe34.
Its $15.8billion acquisition of UK’s Abbey National
(now rebranded as Abbey) in July 2004 has
remained the biggest cross border European retail
bank acquisition with Abbey rising from two
consecutive years of heavy losses prior to the deal
caused by bad debt to exceeding financial target
in 2005 by contributing €811m to the group’s profit.
Lessons Learned and Success Factors
Many financial services firms just like most
conglomerates have structures that have grown
due to the legacy of management tinkering,
models such as matrix management or command
and control have been used and in some cases
have ended up making the organization more
complex than it should due to growth therefore
distorting responsibilities. The lessons learned from
this merger can be described as indispensable to
the successful outcome of the colossal time and
investments that was spent by executives in the

preparation of the aftermath of the organizational
integration.
1. Although acquisition was nothing new to
Santander having previously had substantial
experience in merging with and acquiring banks in
countries such as Germany and Spain as well as
Latin America, critics had believed that it would
be difficult for large European banks to access the
UK financial market. This in part was largely due to
the fact that in the past there had been instances
where legal or regulatory frameworks have been a
major stumbling block. Abbey, proved everybody
wrong with the deal worth a whopping $15.8billion
creating a new bank with a market capitalization
of about $62billion and placing Abbey among the
10 leading banks in the world by market
capitalization according to the banks Chairman,
Emilio Botin (Rincon Castellano 2004).
2. With Abbey being an established brand and
the UK’s second largest mortgage lender boasting
a strong branch network providing retail banking
services to a wide customer base. Santander’s
management focused clearly on acquiring
Abbey’s assets35. With this clear defined goal
Santander was able to grow its asset base by 76%,
which has resulted in the double-digit growth of
the Santander stock price.
3. In the course of this merger it was critical that
Santander carried out a comprehensive research
into the UK financial markets to enable them
create value to the shareholders of Abbey, create
mutual gain for the board of both companies
while make Abbey more profitable as a whole.
The effective management of this change process
gave Santander detailed insight into local
conditions and culture, this meant that instead of
simply replacing Abbey with a Spanish banking
model, the resulting merger saw the complete
transformation of Abbey.
4. Banco Santander had a vision of achieving pre-
tax cost savings of €450 by the end of 2007
whereas Abbey was not performing well against
industry benchmark. Santander quickly noticed an
opportunity to improve Abbey’s efficiency by
focusing on implementing its best practices in IT,
customer operations sales and head office. Also in
achieving these cost synergies promised to
investors around 4,000 of Abbey’s workforce were
made redundant by the time the deal was sealed
with a further 2,500 job losses expected with the
remaining jobs redefined to strategically align with
Santander’s standards of excellence.
5. With institutional shareholders recently
demonstrating their willingness to oppose high
profile deals which they perceive to have
inadequate strategic logic, Santander recognized
the need to secure the blessing of their newly
assertive shareholders by adopting a multi-
stakeholder approach in its acquisition of Abbey.
Integral to the success of this transformation was
the involvement of trade union representatives36 in
sharing information and negotiations on priority
issues to ensure the management and employees
of Abbey weathered the intricate change
process.
The Significance of following a
Stakeholder Contextual Analysis
in Organizational Change
Exercises
By taking into consideration the far reaching
effects of the change process, stakeholders are
the individuals or organizations whose different
needs and expectations will be affected by the
outcome of a change process, therefore, the
satisfaction of their needs and expectations is
critical to the success of the process (Newell 2002).
Stakeholder contextual analysis is used to
determine the strategic stakeholders (internal and

external) to a change process by identifying their
interests, expectations, needs and requirements
and also what the project requires from them
including perceived risks or viewpoint which they
have and what can be done to mitigate them
and there are also various ways of determining
this37.
It is critical that when undertaking any
organisational change program, due diligence be
performed to ensure that the stake holders have
some input on the effects that the change
program will have in their lives, thereby generating
a greater sense of ownership by allowing the
stakeholders take responsibility right from the
initiation phase of the project. This analysis is key to
capturing potentials risks and issues and identifies
sources of information that are business critical as
well as parties that should be involved at various
stages of the exercise. It also helps develop
mitigating strategy for negative stakeholders and
an effective communication plan for negative
publicity where they may occur. Findings suggest
that meticulous stakeholder analysis helps ensure
that their change project succeeds where others
fail.
Finally
The importance of human factors as well as social
and cultural change has been identified as the
new success factors in mergers and acquisitions,
this has also been evident in all the companies
who we have critically analysed so far. In
conclusion when embarking on a change project,
management have to be careful to ensure that
cost synergies achieved with less impact on the
culture of the acquired company.
FINAL THOUGHT
“Where there is commerce, there is peace” – JEFFREY TUCKER

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Appendix
The use of a power grid just like this can be used in
determining important stakeholders in a project. In
this model, each stakeholder is mapped to
different quadrant based on their interest on the
project against the influence (power) they have
over the project.
High power, interested people: these are the
people you must fully engage and make the
greatest efforts to satisfy.
High power, less interested people: put enough
work in with these people to keep them satisfied,
but not so much that they become bored with
your message.
Low power, interested people: keep these people
adequately informed, and talk to them to ensure
that no major issues are arising. These people can
often be very helpful with the detail of your
project.
Low power, less interested people: again, monitor
these people, but do not bore them with excessive
communication.

Endnote
1 KLM had four core activities – passenger transport, cargo
transport, engineering and maintenance and the operation
of charters and low-cost/low-fare scheduled flights.
2 With the French government holding 44% equity stake in
the company.
3 Air Orient, Air Union, CIDNA and SGTA Farman.
4 Having had an initial experience in mergers Air France later
expanded through its acquisition of UTA in 1990 and
absorbing Air Inter by merger in 1994 while KLM having no
background in mergers or acquisitions had only engaged in
commercial agreement with other carriers prior to its merge
with Air France.
5 In terms of revenue the merged entity became the largest
airline company in the world with revenues of €19.2bn more
than any other airlines revenue and combined earnings of
€18.21bn in the fiscal year 2003-2004.
6 Though there were 106 long haul destinations with KLM
offering 90 and Air France 40, however, between the two
airlines they only shared 36 in common; the merger meant
the new group benefitted from much larger network of flight
destinations. Strategically the KLM hub of Amsterdam-
Schiphol was the most valuable asset to the merger by
giving Air France the advantage of linking Paris-Charles de
Gaulle its own hub to Schipol thereby maintaining two of
the biggest European hubs.
7 This strategic competitive advantage even British Airways
(BA) cannot match as it has prevented BA from establishing
a hub at Amsterdam to complement its London-Heathrow
base.
8 In June 2000, British Airways and KLM revealed that they
were contemplating a possible merger; however, the talks
did not materialize. According to analysts the management
of KLM was not ready to give away the control of the
company to the extent which British Airways wanted.
9 The combination is guided by a common steering
committee, the Strategic Management Committee (SMC)
which lays down the main lines of strategy, with both airlines
contributing to it.
10 This meant some work streams with corporate cultures
strongly linked to the other was not included.
11 Collective agreements with the trade unions and a
European works council were set up.
12 Peter Hartman is KLM’s President and Chief Executive
Officer: Both KLM and Air France very deliberately chose to
retain their own identities after the merger. KLM will remain
KLM, with Schiphol as its home base. The KLM brand - and
the loyalty shown to it by our customers, our own personnel
and our other associates - is too valuable to give up. The
same goes for Air France.
13 Jean-Cyril Spinetta was the CEO of Air France since 1997,
he became the Chairman and CEO of Air France-KLM after
the merger and the main instigator of the merger.
14 Leo van Wijk was the President and CEO of KLM Dutch
Airlines, he became Vice-Chairman of the Board of
Directors of Air France-KLM as well as retaining his former
position until April 1, 2007 when he was succeeded by Peter
Hartman.
15 Currently with an annual turnover of €23billion employing
103,000 staff globally, Air France-KLM owns a fleet of 569
aircraft transporting 73.5 million passengers per annum
worldwide. With passenger transport accounting for 80% of
the group’s turnover, it now ranks first in the world for
business volume, second in the world for the numbers of
passengers carried and second in the world for numbers of
international passengers carried.
16 It is the worldwide leader in the seafood can market, the
European leader in cans for dry foods, the European co-
leading supplier of aerosols and the second largest
European supplier of food cans.
17 Impress has made 9 major acquisitions since 1997: in
France and in the USA in 2000, then in Denmark, Poland,
Canada, the UK, Germany, Spain, Ukraine, Russia,
Seychelles and Morocco, they include Heinz USA StarKist,
Ferembal, Nestlé end making plant in Hamburg, PAK
Sp.z.oo, Connors Bros, Alcan, Himpak, Global Investment
LLC and Amcor.
18 Through alliances built with its customers, Impress provides
unique blueprints for design-to-delivery solutions that
optimise supply chain management, improve cost
efficiencies and increase value.
19 APS supplies cans for the food and pet food markets. It
also makes printed specialty containers. The unit has annual
sales of about €60m.
20 Both entities are open to each other from the onset
thereby creating an atmosphere of trust, transparency and
teamwork.
21 MGE UPS Systems has a worldwide network with 37
subsidiaries and operations in more than 100 countries.
22 According to Jean-Pascal Tricoire, Chairman of the
Management Board and CEO after successful integration
with APC and subsequent merger with MGE UPS “we have
gained global leadership in the very promising critical
power and cooling services market, broadened our
technological portfolio and considerably expanded our
accessible market” Schneider Electric SA (2007).
23 Schneider seeks to acquire companies in adjacent sectors
in order to create growth and revenue synergies, but also to
give the company access to new channels and
technologies.
24 With a database of between 500 and 1,000 potential
targets this exercise remains critical as it allows Schneider to
screen based on indices such as management, turnover
and performance. Schneider only ends up acquiring
between 7% and 10%.
25 Hence, where the target company does not genuinely
complement Schneider’s strategy the deal will not follow
through.
26 Schneider never engages in mergers for the sake of
mergers do not end up creating any value for Schneider
Electric in the long term. Neither, do they embark on hostile
takeovers: ‘friendliness’ is a key component of the success
strategy.
27 Danske Bank having been founded in 1871 has grown
through a series of mergers with other financial institutions
within Denmark and countries in the Baltic region as such is
not new to the idea of mergers.
28 The Danske Bank Group is made of entities such as
Danske Bank, BG Bank, Realkredit Denmark, and a number
of subsidiaries, offering a wide range of financial services,
including insurance, mortgage finance, asset management,
brokerage, credit card, real estate, and leasing services.
29 National Irish Bank has about 800 employees, 59 branches
and 13 business banking centres with a customer base of
134,000 and financial assets worth €2.9bn.
30 The Human Resource division of National Irish Bank was
actively involved in the due diligence process from
inception
engaging in social dialogue and a strategic focus on
industrial relations. Employees now have greater job
satisfaction and

contentment.
31 Danske Bank had to revive the bank by making a
significant investment and also reassuring the IBOA of job
security by committing to no redundancies.
32 The firm’s main business areas are commercial banking,
investment and pension funds, investment banking,
corporate banking, Internet and telephone banking, and
treasury and capital markets.
33 With operations in 40 countries, Santander also has
subsidiaries including Banco Santander-Chile, Banco Río in
Argentina, Brazil’s Santander Banespa and Mexico’s
Santander Serfín.
34 Grupo Santander bank offers financial services in Spain,
the U.K. (through Abbey), Portugal, where it is the third-
largest banking group, and other parts of Europe. The firm’s
main business areas are commercial banking, investment
and pension funds, investment banking, corporate banking,
Internet and telephone banking, and treasury and capital
markets.
35 Santander saw a value creating opportunity based on
exploiting the untapped potential of Abbey assets by
implementing Banco Santander’s commercial and
technological best practices to Abbey’s banking
operations.
36 Santander understands the importance of nurturing these
relationships and has high hopes for Abbey’s future as part
of the group.
37 See Appendix

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