1、A.T.Kearney4/1375C/MergerIntegration108319_Macros1March2002Merger IntegrationIntellectual Capital CollectionGeneric ProposalA.T.Kearney4/1375C/MergerIntegration108319_Macros3Table of contentsnExecutiveSummarynOurUnderstandingofYourSituationnA.T.KearneysPerspectiveonMergerIntegrationnProposedOverallA
2、pproachnRealizingIntegrationSynergiesnIntegrationManagementnA.T.KearneyQualificationsA.T.Kearney4/1375C/MergerIntegration108319_Macros4Executive SummaryThis section is tailored to the client situation and summarizes the approach proposed in the documentA.T.Kearney4/1375C/MergerIntegration108319_Macr
3、os5Our Understanding your SituationThis section is tailored to the client situation and summarizes the key drivers of the merger.It should highlight relevant quantitative and qualitative analysis that demonstrate our insight into the clients particular challenges and drivers of success for the integ
4、rationA.T.Kearney4/1375C/MergerIntegration108319_Macros6A.T.Kearneys Perspective on Merger IntegrationA.T.Kearney4/1375C/MergerIntegration108319_Macros7The best value-builders combine organic growth with mergers and acquisitionsSource:A.T.KearneyMonographonValue-BuildingGrowth2001RevenueGrowthValue
5、GrowthUnder performersProfit SeekersSimple GrowersValue GrowersGrowth Matrix(CAGR 1988-2000)13.8%-2.7%RevenueValue18.0%21.5%RevenueValue3.6%-3.6%RevenueValue4.1%12.8%RevenueValueValue Growers Follow Conscious,Constant Process To Growth A.T.Kearney4/1375C/MergerIntegration108319_Macros8Mergers and ac
6、quisitions are key growth driversWhat really matters in“acquisition for growth”strategies is executionSource:A.T.KearneyMonographonValue-BuildingGrowth200140%100%60%ExternalInternalTotal GrowthSources of Growth40%of Growth Is From Acquisitions Value Growers Manage Both WellA.T.Kearney4/1375C/MergerI
7、ntegration108319_Macros9Few mergers actually create shareholder valueSource:A.T.KearneyAnalysis2001,SDCdatabase,GlobalWorldscopeAcquirers Value Growth Following a MergerTop performing mergers create significant shareholder valueValuegrowth3%8%12%27%21%16%3%Underperformance compared to industry avera
8、geOverperformance compared to industry average-100%-60%-30%30%60%150%-15%15%0%Average:2.8%49.5%50.5%Top-PerformingMergers10%A.T.Kearney4/1375C/MergerIntegration108319_Macros10Business Integration issues require“usual”management decisions while four main factors add another level of considerable comp
9、lexity Scope Highnumberofdecisionstobemadeinalloperationalandfunctionalareas Dozensofprojects/initiativesandriskstobemanagedTime pressure Allstakeholdersexpectrapidexecution(shareholders,employees,management,regulationcommittees,government,)DecisionsneedtobemadewithoutdelaySimultaneity Co-existenceo
10、fstrategic,tacticandoperationaldecisions Stronginter-dependenceofthedecisions ShorttermandstrategicdecisionsmayseemincompatibleHuman component Highnumberofpeoplepotentiallyinvolved(operational,functionalandexecutivepeople)Riskofculturalmismatch ScarceresourcestobridgebetweenmergedcompaniesUsual Mana
11、gement decisionsStrategy&IPODefinethescopeofcombinedentityConfirmeachcountrysscopeofactivityformobilesDesignstrategyleveragingonbroaderglobalpresenceDefinefinancialandoperationaltargetsaswellastimingofexpectedbenefitsPreparetheIPOOrganisationChoosethebestorganisationalmodelattheEuropeanmanagementlev
12、elIdentifythecentral/localfunctionsevolutionscheduleDefineorganisationalchartsandmanagementnominationDefinekeydecisionprocesses(committees,procedures,)InfrastructureReducetotalcostofexternalpurchasesthroughbestpriceevaluationvolumeconcentration,competitivebiddingSharebestpracticesSupport functions R
13、ationalisesharedsupports(AlignandselectInformationSystemsfortheintegrationAlignprocessesandsharebestpracticesCommunicationDefineexternalcommunicationstrategyDefineinternalcommunicationstrategySelectcommunicationrulesandproceduresChoosemedia(intranet,documents,speeches)Integration mgnt Integrateovera
14、llplanningandmilestonesDetailplanningbytopicandcountryManagetransitionphaseTrackandexecutefinancialsynergiesManagerisksA.T.Kearney4/1375C/MergerIntegration108319_Macros11 explaining why only few mergers and acquisitions succeed fully Note:(1)Shareholderreturnsfrombuyerdividedbyshareholderreturns(ind
15、ustryaverage)afterthemergerSources:A.T.Kearneyanalysis,GlobalPMISurvey,1998;Datastream29%14%57%HigherNochangeLower100%=230 companiesOnly 29%of Companies Realize an Increase in Aggregate ProfitabilityPerformance relative to industry average10%11%21%18%17%23%-15%-25%+15%+25%Top PerformingMergersUnder
16、performance Outperformance Number of companiesIndustry averageOnly 42%of Companies Outperform Their Peers in Shareholder Value(1)42%58%A.T.Kearney4/1375C/MergerIntegration108319_Macros12Top performers across most industries can create significant shareholder valueCreation ofShareholderReturnsErosion
17、 ofShareholderReturnsNote:(1)Totalshareholderreturnspercentageover/underperformancerelativetoindustryindexinthetimeframebetween3monthsbeforeand24monthsaftermergerannouncement;totalshareholderreturnsdefinedasthetangiblereturnsinvestorsreceivethroughdividendsandstockpriceappreciationsSources:Datastrea
18、m;A.T.KearneyAnalysis2001Retailers62.5%64.5%32.3%44.2%26.6%49.9%34.2%26.6%36.1%25.1%16.0%43.3%26.0%27.5%17.2%17.4%31.9%22.4%18.0%40.4%17.4%14.8%4.0%-6.5%-31.5%-38.9%-10.8%-25.9%-11.0%-35.0%-20.6%-17.6%-28.8%-18.0%-9.7%-39.6%-22.7%-24.9%-17.4%-20.3%-35.3%-26.7%-24.1%-46.8%-26.5%-27.2%-19.4%-24.1%Recr
19、eationChemicalsMetal ProducersPaperTransportationDiversifiedDrugs,Cosmetics&Health CareUtilitiesAutomotivePrinting and PublishingElectronicsFinancialBeveragesMetal Products ManufactureFoodTobaccoMachinery&EquipmentElectricalMiscellaneousOil,Gas,Coal&Related ServicesConstructionTextilesAerospaceIndus
20、try Specific Ranges of Value Creation(1)A.T.Kearney4/1375C/MergerIntegration108319_Macros13Once the deal is closed,the principal problems relate almost entirely to failures in merger management,rather than to the underlying strategic rationaleProblems Identified inMerger Integration21%26%26%32%37%37
21、%47%47%58%Under-communicationFinancial/synergy Expectations Unrealistic/UnclearNew Org.Structure With Too Many Compromises“Master Plan”MissingMissing MomentumMissing Top Management CommitmentUnclear Strategic ConceptMissing Pace of ProjectIT Issues Addressed Too LateSource:A.T.KearneysGlobalMergerIn
22、tegrationSurvey1998Percent of RespondentsA.T.Kearney4/1375C/MergerIntegration108319_Macros14To manage inherent risks,“critical success factors”can be distilled from successful large-scale mergers to guide value creationCritical Success Factors from Large-Scale MergersSource:A.T.KearneyMergerIntegrat
23、ion Createasenseofurgencyandreduceuncertaintythroughcleareventmilestones,andmovequickly Selecttop-levelleadershipquicklyandfairly;avoid“two-in-the-box”leadershipforintegrationplanningandexecutionunlessabsolutelynecessary Setoutsynergygoalsandobjectives,toprioritizeactivitiesandprovideabaselineforper
24、formancetracking Managemarketexpectationscarefully.Setconservativedollartargetswithatimeframethataccommodatesunforeseencircumstances Keepstrong,explicitfocusonkeycustomerretentionandservicewithteeth(i.e.,measurementandtracking)Maintainopenandtimelycommunicationswithemployeestoensureunderstandingandr
25、etention Conductdecentralized merger Integrationguidedforciblyvia Clearguidingprinciples Overallframeworkandtoolsforintegration Reportingstandards EstablishastrongcentralIntegrationofficeanddecentralizedIntegrationteamswithcorporate-wideperspectiveson Results Projectstatus Risk Leadroleoninternal/ex
26、ternalcommunications Instillrobust,well-definedprocessestoensureobjectiveandtimelyriskandinterdependencytrackingSense of UrgencyTop-Level Leadership Selected QuicklyClear Synergy GoalsManage Market ExpectationsExplicit Focus on CustomersOpen,Timely and Consistent CommunicationsDecentralized Merger I
27、ntegrationStrong Central Integration OfficeWell-Defined ProcessesA.T.Kearney4/1375C/MergerIntegration108319_Macros15Source:A.T.KearneysglobalPMIsurvey98Value Capture of Top Performers Over Time15%Year 1Year 2Cumulative ValueCapture After Two Years85%TimeClosingthe Deal12345678910-10-8-6-4-20246Value
28、Capture/Loss($MM)Year in Which Synergies Are RealizedTiming of Synergy Realization Is Also CriticalSource:MarlLSirower:TheSynergyTrap.Calculatedbasedona$10MMacquisitionpremium,representing50%ofmarketvalueIn our experience,the most critical element in achieving targeted benefits is speedA.T.Kearney4/
29、1375C/MergerIntegration108319_Macros16Proposed Overall ApproachA.T.Kearney4/1375C/MergerIntegration108319_Macros17A.T.Kearney has a flexible merger integration framework with a comprehensive toolkit to support planning and implementation throughout the merger process to ensure value captureA.T.Kearn
30、eys Merger Integration FrameworkDevelop StrategyEstablish Structure and PlanMerger/AcquisitionoptionsCreate/articulate/validate Markets/customers Competition Resources SourcesofvalueUnderstandtypeofmergerEstablishtheintegrationprogramBuildintegrationcapabilityAssesssourcesofvalueDeveloporganizations
31、trategy&designDevelopITintegrationstrategyDesign/harmonizeHRpoliciesCreatemasterplanandprioritizeValidatesourcesofvalueImplementquickhitsDevelopSOVITenablersImplementHRplanMonitorprogressandriskExecutetheplanRealigntheorganizationImplementITintegrationplanMerger Manage-mentSourcesof ValueMergerEnabl
32、ersChange of ControlShareholder ApprovalMOUIntegrated Planning and Initial RolloutFull-Scale RolloutDayOnePhase 0Phase IPhase IIPhase IIIMultiple ToolsExist for All CellsA.T.Kearney4/1375C/MergerIntegration108319_Macros18This allows merging entities to rapidly capture available sources of value by f
33、ocusing on operational synergies,as well as seamlessly merging the organizationsMerge the Organizations as Seamlessly as Possible Developandcommunicateasharedstrategicagenda Define Organizationstructures/leadership Keybusinessprocesses Technologyplatform/architecture Changeintegrationrequirements Dr
34、ivetoplinegrowth Newvaluepropositions/products Crossselling/salespullthrough Ensurecustomerfocus/retentionIntegrate day-to-day operations Ensure sustainable changePosition for growth Achieve$XXmillion(annualrate)ofsynergysavingswithin1218months Sales Operations Procurement Corporateoverlapandduplica
35、tion Costofdistribution Technology/R&D Otherstobeidentified Eliminate/minimizesourcesofriskDrive the short-term valueExceed the markets expectationsMI Sources of ValueAchieve Growth Synergy and Cost Synergy Targets as Quickly as PossibleA.T.Kearney4/1375C/MergerIntegration108319_Macros19The program
36、structure supports focused value capture teams working across all SBU/Geographic teamsIllustrativeIntegration Office OthersSteering Committee Business Develop-ment TeamCorporate CenterTeamGlobal OperationsTeamGlobal SourcingTeam Technology/R&DTeamHuman ResourcesTeamInformation TechnologyTeamSBU A or
37、 N.AmericaSBU B or Latin AmericaSBU C or EuropeSBU D or Asia PacificBU driven integration to set prioritiesFocused on value capture across the businessesMarketFacingTeamsValueCaptureTeamsEnablerTeams Setoveralldirection Makecriticaldecisions Developguidingprinciples Provideintegrationmanagementleade
38、rshipandsupportA.T.Kearney4/1375C/MergerIntegration108319_Macros20Implementation Full-Scale Rollout Integrated Planning and Initial Rollout Establish Structure and PlanBy launching the integration effort prior to change of control,significant progress is made in identifying sources of value,while al
39、so developing the high-level organization models to capture that value Integration Management IT Requirements/Alignment High-Level OrganizationDataRepositoryComm.PlanningOversight/Visibility RmAnalysisOpportunitiesInitial PrioritizationInitial SequencingData Collection/AnalysesOperations/Asset Conso
40、lidationDiagnostic Pack PP 1 PP 2 PP 3 PP 4HMLHMLInitQ1 Q2 Q3 Q4PP1PP2PP3PP4Data Collection/AnalysesBusiness Unit(e.g.,Services)Diagnostic Pack CS 1 CS 2 CS 3 CS 4HMLHMLInitQ1 Q2 Q3 Q4CS1CS2CS3CS4Phase I(“Clean Team”)Hypotheses 1Hypothesis N Hypotheses 1Hypothesis N Master CalendarDay/Week/Month 1 P
41、lansSources of Value IdentificationBaseline Dev./TrackingA.T.Kearney4/1375C/MergerIntegration108319_Macros21During the critical period prior to change of control,the engagement team assumes the role of a“clean team”to enable critical pre-merger integrationRole of Clean Team Quantifysavingsgeneratedf
42、romidentifiedopportunitiesfromteamsofmergedcompanies Actasathirdpartyconduitforproprietaryinformationofbothcompanies(protectionshouldmergerbeaborted)Validateandchallengeinitialassumptionsofopportunitiesmadebymergingcompanies Highlightbestpracticesinexistingcompaniesandexternalknowledgeandrecommendon
43、goingmergedoperatingpractices DetermineriskfactorsinmergerforongoingriskmanagementduringimplementationData CollectionOrganization assessmentHypotheses developmentPreliminary planningCompany ACompany BOpenJoint Client Team MeetingsA.T.Kearney“Clean Team”Merger SynergyHypothesesPre-Change of Control P
44、ost-Change of ControlValidated Initiatives Acceleratedecisionmakingbyprovidingaccesstocomprehensivedatabasesanddetailedanalysis Shareandvalidatefindingswithjointclientteams Finalizeinitiativesbasedonvalidatedhypotheses Developimplementationplans Assistinlaunchinginitiativesandprovidecontinuedimpleme
45、ntation,riskandfinancialtrackingsupportThe up-front work efforts of the“clean team”enables accelerated launch of implementation activities and value capture“Clean Team”Process LimitedJointClientTeamMeetingsA.T.Kearney4/1375C/MergerIntegration108319_Macros22After change of control,the teams quickly f
46、inalize not identify synergy opportunities and gain consensus Results Tracking/Risk Assessment Begin ImplementationInitial Prioritization and SequenceMaster Plan SequencingFull Team Meetings DiscloseandValidate ModifyandRefine FinalizeSavingsOpportunitiesandPrioritization IdentifyInterdependenciesHM
47、LHMLOverall Prioritization/Executive Committee Buy-InInitQ1 Q2 Q3 Q4MD1ST3SC6PP4SC6 WorkplanST3 WorkplanMD 1 WorkplanStep1234Investment RequirementsTiming of ResultsMaster Plan Detail Day/Week/Month 1 ExecutionPhase IIInitQ1 Q2 Q3 Q4PP1HMLHMLInitQ1 Q2 Q3 Q4PP1HMLHML IT Requirements/EnablersMaster Pl
48、an Detail Communication Full-Scale Rollout Integrated Planning and Initial Rollout Establish Structure and PlanA.T.Kearney4/1375C/MergerIntegration108319_Macros23MD 1 WorkplanActivityTask 1Task 1Task 1Task 1Q1Q2Q3Q4The transition to full-scale rollout and implementation of initiatives is supported b
49、y a clear tracking process Program Risk ManagementTop 10 Program Risks as of 06/24 Organization announcement timing still unclear IT requirements not fully understood No plans to address cultural misalignment Success of communication not currently planned to be measuredIllustrativeInitiative Status
50、ManagementSize=$Saved61218GreenYellowRedRiskTime to Complete ImplementationInitiativeCurrent QuarterCum.Qrtly.BreakdownJan.Feb.Mar.4Q97 1Q98 2Q98Cost Saves and Growth AchievementImplementation CommunicationPhase III Full-Scale Rollout Integrated Planning and Initial Rollout Establish Structure and P
