Glenmore – XStrata Acquisition: Value Creating Masterstroke or Just a Super Bloated Creature?

A record breaking combination is underway with the 90 billion fusion of the UK based Glencore International Plc with Swiss based XStrata Plc corporation. There are concerns about whether this massive ratcheting up in size brings with it greater ability and effectiveness or will the acquisition result in a bloated, less focused and sluggish creature. The question is whether this massive transaction will actually create value that its backers have promised or destroy it.

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The “New Normal” Continues into the New Year

Our New Year 2012 will carry over many of the characteristics of 2011, but of course with its own novel twists. The caution is not to even try to live in the past this year. If you do, you’ll find yourself falling further off the mark than even in 2011. All of these developments come together in what we call “Integration 2.0”. A successful acquirer will customize its own set these approaches so that it can be fully geared to the challenges of 2012 and come out with quantum leap successes.

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Community Management Enables Successful Acquisition Integration

Another element is making its way to the integration forefront. This is the “community management” approach to frame and execute the integration. How community management may be a better way to carry out the full range of integration processes, including such vexing problems as culture clashes that can hinder and undermine the transition into the “new company”.

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The Changing M&A Landscape: Trends and Countertrends

First, the world economy continues to churn and funding its tightening. Are we headed into a downturn or is the broader truth that we are in the midst of major change and reconfiguration of economic realities? We examine the changing M&A global landscape, looking into the dynamic trends and countertrends that shape the market and our opportunities. Step back from the day to day and think about where we have come from and where we are going.

Second, there are companies that continue to surprise in being successful, even more successful than incumbent companies in their own field or across borders in very different countries. What is their “secret sauce”? What is involved in coming up with your very own version of a “secret sauce’?

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M&A’s Continue Unabated During Economic Roller Coaster

August has been a month filled with upheaval. This is the month that world economies took front row seats on a major economic roller coaster ride that had many of the signs of heading into a next global recession. In the midst of all of this volatility the M&A world had its greatest volume “Merger Monday” for acquisitions of all of 2011, to the surprise of many. Adding a further dimension to this extraordinary mix, HP and Bank of America announced massive corporate divestitures. Their sell offs are the outcome of ill conceived acquisitions and ineffective integrations that took place years earlier, in 2008 and 2004. At root, all of this underscores the reality that acquisition strategy and integrations are not a sprint, but instead are a marathon: a whole process, not a loosely joined series of event…This and more in the August Newsletter!

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Communications Strategies for Integrations

The Newsletter focuses on the role of a strategic communications plan to positively connect with all stakeholders during an integration. How did Southwest Airlines is leveraging its inflight magazine’s 40th Anniversary edition to update its passenger customers about how its integration of AirTran in an informative and entertaining way? Also explored is the Beyond the Deal framework for how to manage both internal and external communications during an integration. A well thought out and executed strategic communications initiative is part of the critical glue that keeps all stakeholders informed and positively linked to the integration

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More to Integration Than Getting “The Trains to Run”, Keys to M&A Success and Articulating a New Vision

In the recent combining of two of the largest REIT companies, AMB and ProLogis perhaps more importantly both Co-CEO’s are outspoken in their view that there is more to an integration than getting the new company in operation – “getting the trains to run” as they put it.

Highlights of a report issued by Boston Consulting Group (BCG) that identify the key drivers for successful outcomes in the over 26,000 acquisitions it has followed since 1988.

Articulating the vision for the new company becomes the context for all decisions, both large and small at all levels of the company. It frames the company’s integration planning as well as the implementation of the integration plan that kicks off “Day One”.

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Integration Issues & Partnering: A Capability to be Cultivated

In this edition we first look at several acquisitions that illustrate broad reaching issues and trends in current acquisition practice. Each demonstrates that there is more to acquisitions and integrations than a simple plan that can be neatly carry out an in isolation. Rather, each shows that acquisitions take place in a context and most often the integrations that follow do not play out on the straight, logical line we would like them to.

We then examine the importance of adopting an authentic partnering approach in acquisitions. Making the choice to cultivate a partnering relationship is key to engaging the acquirer and the acquired firms from top to bottom and across the board. A partnering capability is usually given lip service, if that. Overcoming the tendency to say “We bought you, we own you…It is our way or the highway” requires a major shift but that is exactly what is necessary to enable the access and flow of capabilities that become the basis of the newly combining firm.

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Could Your Approach to M&A Be Both Confused and Wrong?

Executives often believe they can achieve extraordinary returns by acquiring another firm’s resources and so pay far too much. Alternatively, they walk away from potentially transformative deals in the mistaken belief that the acquisition is overpriced, or they destroy the value of a high-growth business model by trying to integrate it into their own….Sounds like a mess–and it has been a mess. But it need not be.

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Capabilities-Driven Strategy + Core Integration Capabilities = Quantum Leap Acquisition Gains!

Leinwand and Mainardi skillfully demonstrate how choices of specific capabilities support the a company’s ability to create its brand of distinctive value. Our caveat is that, while specific capabilities are the foundation for path and actions for a company, it remains the case that it is the core integration capabilities that enable an integration that can achieve unprecedented results. Armed with this realization we can better articulate how a core set specific capabilities can join with the full power of core integration capabilities to yield the full complement of what a company needs for its quantum leap change.

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