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    ROLE OF HUMAN RESOURCEROLE OF HUMAN RESOURCE

    MANAGEMENT INMANAGEMENT IN

    MERGER & ACQUISITIONMERGER & ACQUISITION

    A PROJECT DONE BYA PROJECT DONE BY

    Mehuli Mondal, Roshni Das, Noor Ainy,Mehuli Mondal, Roshni Das, Noor Ainy,Priyanka Dutta and Arnab Chakraborty(Priyanka Dutta and Arnab Chakraborty(

    M.B.A 2M.B.A 2ndndYear).Year).

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    INTRODUCTIONINTRODUCTION

    A merger is a combination ofA merger is a combination oftwo companies to form a newtwo companies to form a newcompany, while an acquisitioncompany, while an acquisitionis the purchase of oneis the purchase of onecompany by another with nocompany by another with nonew company being formed.new company being formed.The term Acquisition isThe term Acquisition istypically used when ontypically used when oncompany takes control ofcompany takes control ofanother.another.

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    MOTIVES OF MERGER & ACQUISITIONMOTIVES OF MERGER & ACQUISITION

    Quicker way to growth.

    Accessing new markets.

    Taking on the globalcompetition.

    Improving operatingmargins and efficiencies

    Acquiring visibility andinternational brands.

    Buying cutting-edge

    technology rather thanimporting it.

    Developing new productmixes.

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    DIFFERENT PHASES OF M & ADIFFERENT PHASES OF M & A

    STEPSTEP--1 :1 : Pre dealPre deal

    STEPSTEP--2 :2 : Due DiligenceDue Diligence

    STEPSTEP--3 :3 : IntegrationIntegration

    Planning.Planning.

    STEPSTEP--4:4:ImplementationImplementation

    STEPSTEP--5 :5 : Post DealPost Deal..

    PRE

    COMBINATION

    COMBINATION

    POST

    COM

    BINATION

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    IMPORTANCE OF HRM IN EACH PHASEIMPORTANCE OF HRM IN EACH PHASE

    (PRE COMBINATION)(PRE COMBINATION)

    PRE DEAL:PRE DEAL: IdentifyIdentify the strategy driving

    the M/A, locate and select targets, determine

    potential business opportunity, define

    critical success factors, and notify target ofintent.

    H.R ROLE:H.R ROLE: Educate team on HR

    implications, conduct high-level analysis of

    people, org, & culture fit based on availableinformation, identify people-related issues,

    plan for due diligence .

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    PRE COMBINATION (Cont.)PRE COMBINATION (Cont.)

    DUE DILIGENCEDUE DILIGENCE :: Collect and analyzeinformation from the target, assess

    leadership team, summarize findings,

    issues, and risks, and make go/no godecision.

    H.R ROLE : Collect and analyze HR

    related information, identify issues, risks,costs, savings

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    PRE COMBINATION (Cont.)PRE COMBINATION (Cont.)

    INTEGRATION PLANNING :INTEGRATION PLANNING : Set deal

    terms, use information previously collected

    to create plans to combine companies with

    minimal business interruptions, close thedeal.

    H.R ROLES : Secure key talent from target,

    collect more information where necessary,

    create integration team for HR, create HRintegration plans (e.g., culture, organization,

    people, HR processes, HR systems and

    policies)

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    COMBINATIONCOMBINATION

    IMPLEMENTATION :IMPLEMENTATION : Announcedeal and start ongoingcommunication to both companies.

    H.R ROLE : Execute HR IntegrationPlans & adapt as necessary

    Provide ongoing changemanagement for both companies(e.g., management ability to dealwith people issues, training,motivation, systems integration,

    job security/career concerns,

    realistic merger preview, Ethics& Compliance standards)

    Monitor people-relatedintegration activities

    Encourage capture of synergies(e.g., use incentives) and areasof desired lack of synergy

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    POST COMBINATIONPOST COMBINATION

    POST DEAL :POST DEAL : Deal Team evaluates the successful

    capture of synergies and achievement of original

    strategy

    H.R ROLE :H.R ROLE : Capture lessons learned from the

    management of the project

    Evaluate organization, people, processes, systems

    (e.g., 24th month audit)

    Suggest process improvements

    Align with Business Strategy of the Future

    Learn from this deal to be ready for the next deal

    Ongoing involvement in integration of culture

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    OVERALL H.R ACTIVITY IN M&AOVERALL H.R ACTIVITY IN M&A

    PRE MERGER STAGEPRE MERGER STAGE--

    HRHRtakes controltakes controlON MERGERON MERGER--

    Explaining new rolesExplaining new roles

    Meeting between the counterpartsMeeting between the counterparts

    Orientation programsOrientation programs

    Technical retrainingTechnical retraining

    Training managers on the changeTraining managers on the change

    Stress reduction programsS

    tress reduction programsPOST MERGER STAGEPOST MERGER STAGE--

    Evaluation & team buildingEvaluation & team building

    Feedback helpline for employeesFeedback helpline for employees

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    MAJOR MERGERS AND ACQUISITIONS INMAJOR MERGERS AND ACQUISITIONS ININDIAINDIA

    Hindalco acquired Canada based NovelisHindalco acquired Canada based Novelis

    Tata Steel acquired Corus GroupTata Steel acquired Corus Group

    Dr.Reddys Labs acquired BetapharmDr.Reddys Labs acquired Betapharm Acquisition of Daewoo Electronics CorpAcquisition of Daewoo Electronics Corp

    by Videoconby Videocon

    VSNL acquired TeleglobeVSNL acquired Teleglobe

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    M& AM& A--the latest trendsthe latest trends

    The process of merger and acquisition hasThe process of merger and acquisition has

    gained substantial interest in todays corporategained substantial interest in todays corporate

    world. The Indian Economic Reform 1991 hasworld. The Indian Economic Reform 1991 has

    increased challenges both in domestic andincreased challenges both in domestic and

    international spheres. Hence thesituation hasinternational spheres. Hence thesituation has

    undergone a sea change in the past few yearsundergone a sea change in the past few years

    and acquisition of the foreign companies byand acquisition of the foreign companies byindian businesseshas been the latest trend inindian businesseshas been the latest trend in

    Indian corporatesectorIndian corporatesector

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    CONCLUSIONCONCLUSION

    As merger and acquisition activitiesAs merger and acquisition activitiescontinue to step up globallycontinue to step up globally and withand withmanpower being the deciding factormanpower being the deciding factorfor success,the role of H.R in mergerfor success,the role of H.R in merger

    and acquisition is crucial.and acquisition is crucial.