The document discusses the role of human resources in mergers and acquisitions. It begins by defining mergers and acquisitions as representing ultimate change for businesses that can be difficult and chaotic. It then provides statistics on M&A activity and discusses why understanding the process is important. The rest of the document outlines the M&A process and key roles for HR, including assessing cultural alignment, developing integration plans, managing communications, and ensuring retention of key employees.
human resource in merger and acquisitionsKushal Shah
The Human Resource (HR) department plays a pivotal role in the process of merger and acquisition between two companies. ... Thus, HR plays a key role in managing all crises as well as disputes that may crop up in an organization, as and when the process of merger and acquisition sets off.
INTERNATIONAL HUMAN RESOURCES MANAGEMENT- soft models and hard models of HRM such as Harward Model, Michigan Model etc.International human resource management is the process of managing people across international boundaries by multinational companies. It involves the worldwide management of people, not just the management of expatriates.
Types of hr strategies - strategic human resource management - Manu melwin joymanumelwin
Because all organizations are different, all HR strategies are different. There is no such thing as a set of standard characteristics. But two basic types of HR strategies can be identified. These are:
Overarching strategies; and
Specific strategies relating to the different aspects of human resource management.
human resource in merger and acquisitionsKushal Shah
The Human Resource (HR) department plays a pivotal role in the process of merger and acquisition between two companies. ... Thus, HR plays a key role in managing all crises as well as disputes that may crop up in an organization, as and when the process of merger and acquisition sets off.
INTERNATIONAL HUMAN RESOURCES MANAGEMENT- soft models and hard models of HRM such as Harward Model, Michigan Model etc.International human resource management is the process of managing people across international boundaries by multinational companies. It involves the worldwide management of people, not just the management of expatriates.
Types of hr strategies - strategic human resource management - Manu melwin joymanumelwin
Because all organizations are different, all HR strategies are different. There is no such thing as a set of standard characteristics. But two basic types of HR strategies can be identified. These are:
Overarching strategies; and
Specific strategies relating to the different aspects of human resource management.
International human resource management ihrmkoshyligo
International human resource management-IHRM, Introduction, Differences between Domestic and IHRM, Stages of Internationalization , Organisation structures of MNEs
The HR Manager is the most critical role in the HR Organization. The HR Manager represents Human Resources and shares responsibilities with the HR team and the internal client.
The role of the HR Manager is difficult, and the most experienced HR Professionals should be promoted to the role of the HR Manager.
HR POLICIES AND PRACTICES OF TATA MOTORS Shree Ganesh
The presentation is about the HR policies and practices of Tata Motors.
Tata Group believes that people are their greatest asset and they adopt best practices to ensure healthy employee relations, employee growth, and development as well as work satisfaction.
Staffing recruitment and selection of INTERNATIONAL HUMAN RESOURCES MANAGEMENTAparrajithaAriyadasa
In staffing in international business, HR managers must determine when or where to expatriation. Expatriate workers are frequently assigned to key positions in overseas operations. Human resource managers must also decide on the issue of compensation. The compensation of expatriate workers must be examined along with compensation of local workers and the compensation of workers in the home country. Differences in compensation packages have significant implications on staffing success, expatriate performance and business performance. HR managers must also address the issue of repatriation. Repatriation happens when the worker needs to come back to the home country, usually to continue working for the company. Repatriation also happens when the expatriate worker retires. These issues have significant effects on the perspectives and performance of expatriate workers and local workers, and the effectiveness of IHRM in staffing.
Interventions are necessary for an organization to apply for effectiveness in functioning of an organization. this presentation is about part of interventions known as structural intervention.
Strategic Human Resource Management (SHRM) - MBA 423 Human Resources Manageme...Stuart Gow
Chapter Review/ Discussion Questions (CRQs) – 10% marks
At the end of each chapter of the text book, there are chapter review questions (CRQs) which are meant to review and test the student’s understanding of the chapter. The facilitator will chose and then allocate the CRQs to each group during week 2 for class presentations in weeks 3 to 7. Some of these questions are being recommended by Stone as possible essay questions which are frequently asked in examinations throughout the world. The time for each presentation may vary from 10 to 20 minutes followed by class discussions. The group’s power-point presentations, both soft and hard copies, must be submitted to the course facilitator on or before the presentation. No written report is required for CRQs. The class and the facilitator will evaluate each group’s presentation. A blank evaluation form will be made available in class and posted in Moodle. However, the MBA 423 Human Resource Management GSB, FBE, USP facilitator has the final say in terms of the final marks to be allocated to each group. The criterias to be used as a guide for evaluating the CRQ presentations is provided in the blank evaluation form.
MBA 423 Human Resources Management (Elective Course)
The effective management of people has an important bearing on organisational success. The importance of personnel policies and procedures has created opportunity for managers and administrators with expertise in this field. The course provides conceptual and practical skills in areas such as the strategic aspects of human resource management, manpower planning, recruitment and selection, performance appraisal, training and development, salary administration and employee benefits. Industrial relations in the context of the South Pacific region is an important theme.
http://www.usp.ac.fj/index.php?id=mba423
Students:
Stuart Gow
Amrish Narayan
Chaminda Wanninayake
Graduate School of Business
Faculty of Business and Economics
University of the South Pacific,
Private Bag, Laucala Campus,
Suva, Fiji.
Tel: (679) 323 1391/323 1392
Fax: (679) 323 1397
A good strategy is the blueprint for business success. For many organizations, mergers and acquisitions
are a critical component of their blueprint. Although the value drivers such as cost cutting, the promise of
new channels and customers, and improved competitive positioning may vary from company to company,
one thing is constant – after the deal is done, executives need to refresh their strategy and they need to
do it fast.
International human resource management ihrmkoshyligo
International human resource management-IHRM, Introduction, Differences between Domestic and IHRM, Stages of Internationalization , Organisation structures of MNEs
The HR Manager is the most critical role in the HR Organization. The HR Manager represents Human Resources and shares responsibilities with the HR team and the internal client.
The role of the HR Manager is difficult, and the most experienced HR Professionals should be promoted to the role of the HR Manager.
HR POLICIES AND PRACTICES OF TATA MOTORS Shree Ganesh
The presentation is about the HR policies and practices of Tata Motors.
Tata Group believes that people are their greatest asset and they adopt best practices to ensure healthy employee relations, employee growth, and development as well as work satisfaction.
Staffing recruitment and selection of INTERNATIONAL HUMAN RESOURCES MANAGEMENTAparrajithaAriyadasa
In staffing in international business, HR managers must determine when or where to expatriation. Expatriate workers are frequently assigned to key positions in overseas operations. Human resource managers must also decide on the issue of compensation. The compensation of expatriate workers must be examined along with compensation of local workers and the compensation of workers in the home country. Differences in compensation packages have significant implications on staffing success, expatriate performance and business performance. HR managers must also address the issue of repatriation. Repatriation happens when the worker needs to come back to the home country, usually to continue working for the company. Repatriation also happens when the expatriate worker retires. These issues have significant effects on the perspectives and performance of expatriate workers and local workers, and the effectiveness of IHRM in staffing.
Interventions are necessary for an organization to apply for effectiveness in functioning of an organization. this presentation is about part of interventions known as structural intervention.
Strategic Human Resource Management (SHRM) - MBA 423 Human Resources Manageme...Stuart Gow
Chapter Review/ Discussion Questions (CRQs) – 10% marks
At the end of each chapter of the text book, there are chapter review questions (CRQs) which are meant to review and test the student’s understanding of the chapter. The facilitator will chose and then allocate the CRQs to each group during week 2 for class presentations in weeks 3 to 7. Some of these questions are being recommended by Stone as possible essay questions which are frequently asked in examinations throughout the world. The time for each presentation may vary from 10 to 20 minutes followed by class discussions. The group’s power-point presentations, both soft and hard copies, must be submitted to the course facilitator on or before the presentation. No written report is required for CRQs. The class and the facilitator will evaluate each group’s presentation. A blank evaluation form will be made available in class and posted in Moodle. However, the MBA 423 Human Resource Management GSB, FBE, USP facilitator has the final say in terms of the final marks to be allocated to each group. The criterias to be used as a guide for evaluating the CRQ presentations is provided in the blank evaluation form.
MBA 423 Human Resources Management (Elective Course)
The effective management of people has an important bearing on organisational success. The importance of personnel policies and procedures has created opportunity for managers and administrators with expertise in this field. The course provides conceptual and practical skills in areas such as the strategic aspects of human resource management, manpower planning, recruitment and selection, performance appraisal, training and development, salary administration and employee benefits. Industrial relations in the context of the South Pacific region is an important theme.
http://www.usp.ac.fj/index.php?id=mba423
Students:
Stuart Gow
Amrish Narayan
Chaminda Wanninayake
Graduate School of Business
Faculty of Business and Economics
University of the South Pacific,
Private Bag, Laucala Campus,
Suva, Fiji.
Tel: (679) 323 1391/323 1392
Fax: (679) 323 1397
A good strategy is the blueprint for business success. For many organizations, mergers and acquisitions
are a critical component of their blueprint. Although the value drivers such as cost cutting, the promise of
new channels and customers, and improved competitive positioning may vary from company to company,
one thing is constant – after the deal is done, executives need to refresh their strategy and they need to
do it fast.
Mergers and acquisitions are both aspects of strategic management, corporate finance and management dealing with the buying, selling, dividing and combining of different companies and similar entities that can help an enterprise grow rapidly in its sector or location of origin, or a new field or new location, without creating a subsidiary, other child entity or using a joint venture. M&A can be defined as a type of restructuring in that they result in some entity reorganization with the aim to provide growth or positive value. Consolidation of an industry or sector occurs when widespread M&A activity concentrates the resources of many small companies into a few larger ones, such as occurred with the automotive industry between 1910 and 1940. The distinction between a "merger" and an "acquisition" has become increasingly blurred in various respects (particularly in terms of the ultimate economic outcome), although it has not completely disappeared in all situations. From a legal point of view, a merger is a legal consolidation of two companies into one entity, whereas an acquisition occurs when one company takes over another and completely establishes itself as the new owner (in which case the target company still exists as an independent legal entity controlled by the acquirer). Either structure can result in the economic and financial consolidation of the two entities. In practice, a deal that is a merger for legal purposes may be euphemistically called a "merger of equals" if both CEOs agree that joining together is in the best interest of both of their companies, while when the deal is unfriendly (that is, when the management of the target company opposes the deal) it is almost always regarded as an "acquisition". Change management is an important component of talent management, and materially contributes to the success of M&A integration. Talent Management System (TMS)
Success with mergers, acquisitions, divestitures, integration (MADI), including M&A due diligence, requires the design and execution of a customized MADI Plan to ensure achievement of business outcomes, and optimal integration and alignment of the organization’s talent and cultures. A sample framework for M&A, and M&A integration (including talent, process, technology, and execution tools) is presented and discussed herein. Actual approach, techniques, tools, and resources remain to be determined based on business needs, industry practices, geographical practices, organizational preferences, etc.
Cloud computing is a major part of lives of many people already. Services such as Google Maps, Amazon Web Services, Microsoft Hotmail and Apple iTunes are taken for granted as convenient and simple ways to use sophisticated systems of computer. Services of cloud computing can be used to deliver a wide services range to users and have been in practice for many years.
This report analyzes the situation and identifies the elements of the business model that cloud computing as a new opportunity could transform, describes the concept of business that draws the vision of the strategic objectives and goals, and the principle that should direct this transformation. Further, report aims at detailing the strategy to implement the vision, and explains what is involved in business transformation model to realize an envision future by using a dynamic model of Managemnet Assignment help.
Only 20% of mergers succeed. Many assumptions are made during the due diligence phase, and many things go wrong during execution. Our method helps you maximise your chances of success, and mitigate most of the classical risks during the first 100 days especially.
Class #2 Strategic Design of HRD ProgramsBACKGROUND.docxmccormicknadine86
Class #2: Strategic Design of HRD Programs
BACKGROUND ISSUES
Strategic Business Planning;
Strategic Human Resource Development; Traditional Focus of HRD
Lesson ObjectivesBackground issues, the HRD practitionersWhat is Strategic Human Resource Development (SHRD) & its focus?Model for Strategic Business Plan (SBP)Eight steps of Strategic Business PlanningFive key assumptions of SBPFour key assumptions of SHRD
Background IssuesHRD practitioners defined as “Strategists”Develop long range plans for training and development. (Models of Excellence, 1983, p.91)Chief responsibility is to manage the HRD dept. strategicallyDept. planning is important BUT organizational planning for leaning is more important HRD dept strategy… should be related to the organizational strategy
*
Develop long range plans for what the training and dev. structure, organization & direction, policies, programs, services, & practices will be in order to accomplish the training and dev. mission (Models of Excellence, 1983, p.91)
Chief resp: manage the HRD dept. strategically rather than lead efforts to formulate & implement a unified plan to guide the direction of learning in an organization
Dept. planning is important BUT not as important as organizational planning for leaning
The strategy of HRD dept. should be related to what the org should do to encourage planned learning that supports business and staffing plans
Problem/Confusion/Dilemma?HRD practitioners often not included in top-level discussions about business plans..Problem for HR practitioners: Formulating their own plans when Strategic Business Plans are unclear, are not followed by top managers, are not expressed in ways that imply action in the HR dept
*
HRD practitioners often not included in top-level discussions about business plans, yet most amenable to supporting business plans…least used
Problem for HR practitioners:
Formulating their own plans when Strategic Business Plans are unclear, are not followed by top managers, are not expressed in ways that imply action in the HR action
Strategic Human Resource Dev. (SHRD)The process of changing an organization, stakeholders outside it, groups inside it, & people employed through planned learning so that they possess the skills and knowledge needed in the future
*
Focus for SHRDSHRD focuses on HRD effortCoordinated learning activities undertaken by HRD practitioners, operating managers, & employees to support business & HR plans.
SHRD results in Org. Strategy for HRDComprehensive, coordinated plan for major learning initiatives by which a firm’s managers intend to meet business & staffing objectives through organized learning.
*
SHRD focuses on HRD effort:
Coordinated learning activities undertaken by HRD practitioners, operating managers, & employees to support business & HR plans.
SHRD results in Organizational Strategy for HRD
Comprehensive, coordinated plan for major learning initiatives by which a firm’s managers intend to meet bus ...
Strategic, Strategic Management and Business Policyashnanehta
This presentation gives a detailed account of
- What is strategy?
- What are the various levels of strategy?
- Stories of exemplar strategies
- Criteria for Strategic Decision Making
- Phases of strategic Management
- Elements of strategic Management
- Implementation of strategic management model
1. ROLE OF HR IN
MERGERS AND
ACQUISITIONS
Syed Qarib Raza Kazmi
2. Mergers and Acquisitions
Mergers and acquisitions represent the
ultimate in change for a business.
No other event is more difficult, challenging, or
chaotic as a merger and acquisition.
Hence it is imperative that everyone involved
in the process has a clear understanding of
how the process works.
3. Some interesting M&A figures
Virtually every major company in the United States
today has experienced a major acquisition at some
point in history. And at any given time, thousands of
these companies are adjusting to post-merger reality.
For example, so far in the decade of the 1990's
(through June 1997), 96,020 companies have come
under new ownership worldwide in deals worth a total
of $ 3.9 trillion - and that's just counting acquisitions
valued at $ 5 million and over. Add to this the many
smaller companies and nonprofit and governmental
entities that experience mergers every year, and the
M & A universe becomes large indeed.
The Art of Merger and Acquisition Integration,Alexandra Reed Lajoux
4. Why you need to know this ?
You might be asking yourself, why do I need to
learn the merger and acquisition (M &
A)process?
Well for starters, mergers and acquisitions are
now a normal way of life within the business
world.
In today's global, competitive
environment, mergers are sometimes the only
means for long-term survival.
In other cases, such as Cisco
Systems, mergers are a strategic component
for generating long-term growth.
5. M&A defined
When we use the term "merger", we are
referring to the merging of two companies
where one new company will continue to exist.
The term "acquisition" refers to the
acquisition of assets by one company from
another company.
6. Mergers can be categorized as
follows:
Horizontal: Two firms are merged across
similar products or services. Horizontal
mergers are often used as a way for a
company to increase its market share by
merging with a competing company. For
example, the merger between Exxon and
Mobil will allow both companies a larger share
of the oil and gas market.
7. Mergers can be categorized as
follows:
Vertical: Two firms are merged along the
value-chain, such as a manufacturer merging
with a supplier. Vertical mergers are often used
as a way to gain a competitive advantage
within the marketplace. For example, Merck, a
large manufacturer of pharmaceuticals,
merged with Medco, a large distributor of
pharmaceuticals, in order to gain an
advantage in distributing its Products.
8. Mergers can be categorized as
follows:
Conglomerate: Two firms in completely
different industries merge, such as a gas pipeline
company merging with a high technology
company. Conglomerates are usually used as a
way to smooth out wide fluctuations in earnings
and provide more consistency in long-term
growth. Typically, companies in mature industries
with poor prospects for growth will seek to
diversify their businesses through mergers and
acquisitions. For example, General Electric (GE)
has diversified its businesses through mergers
and acquisitions, allowing GE to get into new
areas like financial services and television
broadcasting.
9. Reasons for M & A
Every merger has its own unique reasons why the
combining of
two companies is a good business decision. The
underlying
Principle behind mergers and acquisitions ( M & A ) is
simple: 2
+2=5
Synergy value can take three forms:
1. Revenues: By combining the two companies, we will realize higher
revenues then if the two companies operate separately.
2. Expenses: By combining the two companies, we will realize lower
expenses then if the two companies operate separately.
3. Cost of Capital: By combining the two companies, we will
experience a lower overall cost of capital.
10. Strategic Reasons
However, the best mergers seem to have strategic
reasons for the business combination. These
strategic reasons include:
Positioning - Taking advantage of future
opportunities that can be exploited when the two
companies are combined.
Gap Filling - One company may have a major
weakness (such as poor distribution)whereas the
other company has some significant strength.
Organizational Competencies - Acquiring human
resources and intellectual capital can help improve
innovative thinking and development within the
company.
Broader Market Access - Acquiring a foreign
company can give a company quick access to
emerging global markets.
11. Basic business reasons
Bargain Purchase - It may be cheaper to acquire
another company then to invest internally.
Diversification - It may be necessary to smooth-
out earnings and achieve more consistent long-
term growth and profitability.
Short Term Growth - Management may be under
pressure to turnaround sluggish growth and
profitability.
Undervalued Target - The Target Company may
be undervalued and thus, it represents a good
investment.
12. The M&A Process
Phase 1 - Pre Acquisition Review
Phase 2 - Search & Screen Targets
Phase 3 - Investigate & Value the Target
Phase 4 - Acquire through Negotiation
Phase 5 - Post Merger Integration
13. Phase 3-Investigate & Value the
Target
The third phase of M & A is to perform a more detail analysis of
the target company. You want to confirm that the Target
Company is truly a good fit with the acquiring company. This
will require a more thorough review of
operations, strategies, financials, and other aspects of the
Target Company. This detail review is called "due diligence.“
The main objective is to identify various synergy values that
can be realized through an M & A of the Target Company.
Investment Bankers now enter into the M & A process to assist
with this evaluation.
14. Phase 3-Investigate & Value the
Target
A key part of due diligence is the valuation of the target
company. In the preliminary phases of M & A, we will
calculate a total value for the combined company. We
have already calculated a value for our company
(acquiring company). We now want to calculate a value
for the target as well as all other costs associated with
the M & A. The calculation can be summarized as follows:
15. Due Diligence Check list (HR)
Plan Due diligence for Integration planning
organization Recommend HR policies and
To develop acquisition programs
guidelines Development of a C&B
Understanding the strategy for the combined
employment law companies
issues, critical people issues Retention of key people and
such as leadership, employee separation of redundant staff
communications, talent
retention and cultural communications strategy
alignment development and
implementation
Assessment of critical people
and deployment of Integration of payroll, benefits
appropriate resources in the and HR-IS ( SAP)
new company
Development of
organizational chart and
reporting line
16. Phase 5-Post Merger
Integration
If all goes well, the two companies will
announce a agreement to merge the two
companies. The deal is finalized in a formal
merger and acquisition agreement.
Every company is different - differences in
culture, differences in information
systems, differences in strategies, etc. As a
result, the Post Merger Integration Phase is
the most difficult phase within the M & A
Process.
17. Typical M&A Process
Timeline of M&A Events
Implementation of
Strategic Confidential Price and Terms Preliminary Integration Plans
Planning Courting Negotiations Announcement Program Design Closing and Programs
“DAY 1”
Candidate Formal Program Design
Candidate Formal Initial HR Strategy Identify ImplementationDetailedHR Strategy
Initial ImplementationDetailed Program Design
Scouting
Scouting Due Diligence HR Strategy
Diligence Leaders and Team
Leaders and Team HR Strategy Decisions
Decisions
HR Process
Strategic HR—Due Integration
Integration
Diligence Preparation
HR-Liability Program Create Create Execute Execute Monitor
Strategy Deal
& Synergy Office “100 Day” Optimization Day
100
... Optimization
Synergy
Assessment Input
Gap Assess. Setup Plans Plans Plan Plans Realization
19. Background of Study
Participation: Operations Location
Web-based survey Taiwan, 1%
Indonesia, 1%
conducted in 2006 India, 1%
New Zealand, 3%
Thailand, 6%
Conducted in 11 Australia, 6%
U.S, 7%
China (PRC), 36%
markets: Australia,
China, Hong Kong, India,
Singapore, 7%
Hong Kong (SAR), 7%
South Korea, 15%
Malaysia, 10%
Indonesia, Japan,
Malaysia, New Zealand, Participation: Global Headquarter Location
Thailand, 1%
Singapore, South Korea, Japan, 1%
India, 1%
and Thailand. Other, 3%
Canada, 3%
Conducted in four United Kingdom, 5%
South Korea, 5%
U.S., 26%
languages: Chinese, Australia, 5%
Japanese, Korean, and China (PRC), 7%
English Singapore, 10%
Malaysia, 10%
Europe, 22%
73 companies
participated
20. Why are Companies Acquiring?
Improved market access by far the number one driver of M&A activity:
Improved market access
Combined business creation
Coordinated strategies
Consolidation of functions
Shared know-how
Vertical integration
Shared tangible resources
Other
0% 20% 40% 60% 80%
Percentage of Respondents
Rank 1 Rank 2 Rank 3
21. Synergy Objectives
Growth Return
Improved Coordinated Consolidation of
Tax
Market Access Strategies Functions
Benefits
(bigger is better) (together we conquer) (serve more with less)
Combined Shared Shared Tangible
Financial
Business Creation Know How Resources
Engineering
(new is better) (know more) (use same for more)
Vertical
Negotiating
Integration
Power
(process we own)
Synergies with significant “People integration” Issues
22. Due Diligence Top Objectives
Immediate and short-term objectives dominate. Long-term issues are of
lesser concern:
To determine that the deal can be successf ul in the
immediate/near-term
To def ine the right price
To evaluate the identif ied synergies
To identif y w hat needs to be done during integration
To examine the impact of a potential deal on competitors
and industry
Other objectives of the due diligence process:
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Percentage of Respondents
Rank 1 Rank 2 Rank 3
23. Most Important HR Issues During
Due Diligence
Retention of key staff and compliance with applicable laws are most
important. Much fewer companies focus on long-term issues such as
cultural fit:
Retention of key employees
Compliance with applicable laws
HR Issues
Alignment of comp. & ben. plans
Cultural fit
Employee communications
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Percentage of Responses
Rank 1 Rank 2 Rank 3
24. HR Issues in Due Diligence
HR issues rank slightly different when comparing importance vs.
complexity:
Percent of Companies (Ranking 1, 2, or 3)
According to Importance According to Complexity
Retention of key employees 41% 27%
Compliance with applicable laws 36 31
Quantification of severance/benefit obligations 32 35
Alignment of compensation and benefit plans 26 35
Leadership assessment 26 34
Cultural fit 25 49
Employee communications 24 23
Leadership retention 18 13
Corporate governance 16 13
Labor relations 14 25
Sales force effectiveness 10 17
Organizational structure 9 15
Orange shade: over 30% of companies rank this high
25. Top HR Integration Issues
According to
Importance and Complexity
Culture fit clearly dominates top HR concerns for importance and complexity
during integration:
Cultural fit
Harmonization of compensation and benefit
plans
Areas
Leadership assessment and selection
Decision-making
Employee communications
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Percentage of Responses
Rank 1 Rank 2 Rank 3
26. A Reality Check Why M&A fail
Poor strategic fit - The two companies have
strategies and objectives that are too different and
they conflict with one another.
Cultural and Social Differences - It has been
said that most problems can be traced to "people
problems." If the two companies have wide
differences in cultures, then synergy values can
be very elusive.
Incomplete and Inadequate Due Diligence -
Due diligence is the "watchdog" within the M & A
Process. If you fail to let the watchdog do his
job, you are in for some serious problems within
the M & A Process.
27. A Reality Check Why M&A fail
Poorly Managed Integration - The integration of two companies
requires a very high level of quality management. Integration is
often poorly managed with little planning and design. As a
result, implementation fails.
Paying too Much - In today's merger frenzy world, it is not unusual
for the acquiring company to pay a premium for the Target
Company. Premiums are paid based on expectations of synergies.
However, if synergies are not realized, then the premium paid to
acquire the target is never recouped.
Overly Optimistic - If the acquiring company is too optimistic in its
projections about the target Company, then bad decisions will be
made within the M & A Process. An overly optimistic forecast or
conclusion about a critical issue can lead to a failed merger.
28. A success Story
Trivor Systems Pakistan was acquired by
Bentley Systems Incorporated in may 2007.
Bentley is the global leader dedicated to providing
architects, engineers, constructors, and owner-
operators with comprehensive architecture and
engineering software solutions for sustaining
infrastructure. Founded in 1984, Bentley has
nearly 3,000 colleagues in more than 45
countries, $500 million in annual revenues, and,
since 2001, has invested more than $1 billion in
research, development, and acquisitions.
29. Key Aspects of the Acquisition
Retention of employees with the domain and product
expertise.
1st year plan, 2nd year plan
Alignment of Job titles.
Management structure remained largely intact.
Improved Hardware policies.
Proper Translation of Trivor compensation with Bentley
compensation structure.
All hands Meeting Before formal acquisition process
Formal signing of new contracts.
Introduction of new benefits
Enhancement of health cover
Quarterly Team building events
Continuation of old polices