M&A Integration · M&A Integration Exercise: Coles/7-Eleven • Coles has announced an agreement to...
Transcript of M&A Integration · M&A Integration Exercise: Coles/7-Eleven • Coles has announced an agreement to...
MampA Integration
Mike Sum
22 Sept 2016
Introduction
2
GRAM
The MampA market ndash exampleshellip
Lest we forgethellip
4
Merger Integration Explained
5
Link
A quiz to beginhellip
6
bull ___ of acquirers believe that they create value from their MampAs
bull hellipbut the evidence shows that _____ fail
bull Almost ___ of synergies are paid in the purchase price
bull ___ of acquirers fail to deliver their synergy targets
bull It takes acquirers __ months on average to feel in control
bull Over __ of failures are blamed on lsquocultural incompatibilityrsquo
bull Number one learning point ndash ldquo_____________rdquo
lsquoThe moral is not that merging is always wrong but that it is riskyrsquo
The Economist
Why do mergers fail
7
Keys to successhellip
8
hellipa blend of lsquohardrsquo and lsquosoftrsquo factors
The critical importance of synergies
9
Destroy value
Va
lue
$M
Price paid Value creation
Synergies
Create value
Dis-synergies
hellipbut remember to protect standalone value
The first 100 days are critical to
success
10
Stakeholder perceptions are formed in this
period and are difficult to change
0 25 50 100
Employees
Board
Shareholders
Customers
Gone
Conflict
Switching
Critical
Va
lue
Typical results of poor integration management
Summary balance is the key
11
Maintaining strong control
over the costs benefit
delivery quality and scope
of the programme
Ensuring there are clear
objectives and targets to focus
activity and critical resources
on areas that add the most
value
Balancing integration with driving core business performance
Effective management
of PEOPLE through a
time of uncertainty
Objective challenge and
robust process to minimise
expected RISK
Maximise the expected
VALUE through focus on
areas of benefit
Delivering the benefits
whilst ensuring that
focus is maintained on
core businessrsquos growth
opportunities business
as usual activity and
other change
programmes
Managing key stakeholders
through the change your
employees your clients your
regulators
Source PwC global merger integration methodology
MampA Integration
Exercise Coles7-Eleven
bull Coles has announced an
agreement to acquire the
entire business of 7-Eleven in
Australia
bull The deal is expected to close
in 2 months
bull Until then the businesses
remain separate competitors
with limited access to people amp
data
Teams
1 Coles CEO
2 7-Eleven CEO
3 Coles Integration Director
4 Stores amp Brand
5 Products amp Purchasing
6 Supply Chain
7 Finance
8 IT
9 People amp HR
13
Planning Merger Integration
Exercise Coles7-Eleven
Questions
1 How are you feeling
2 What are your key
priorities in this phase
3 What is keeping you
awake at night
15 mins to consider each team to play back for 3 mins
What does good look like
Integration Principle Desired outcome
1 Accelerate the
transition
ldquoThe integration had a clear sense of pace and
momentum right through to the end Activities were
completed on time or ahead of schedulerdquo
2 Define the integration
strategy
ldquoThe desired outcomes and strategic direction were
clear Decisions were made on a timely basis to enable
rapid progressrdquo
3 Focus on priority
initiatives
ldquoPriorities were clear and focus was paid to key value
driversrdquo
4 Plan the integration
and prepare for Day
One early
ldquoPlanning started early well in advance of Day 1 A
clear plan and timeline were put in placerdquo
5 Communicate with all
stakeholders
ldquoA wide range of stakeholders were engaged
throughout the process in 2-way discussion which
helped to shape the approachrdquo
6 Establish leadership
at all levels
ldquoRoles accountabilities and decision making processes
were clear People took responsibility and delivered to
promiserdquo
7 Manage the
integration as a
business process
ldquoThe process was rigorous enough to add value without
lsquogetting in the wayrsquo or being inflexiblerdquo
PwC Global MampA
Integration Methodology
-Best Practice Principles
Key take-aways
1 Two-thirds of mergers fail - usually because integration fails
2 Start early to ensure a running start on Day 1
3 Dedicate resources and take integration seriously
4 The power of balance ndash value risk people and BAU
5 Pace with structure
6 Communication culture leadership
15
Questions
Mike Sum
Partner PwC
Office +61 (3) 8603 5924
Mobile +61 420 314 505
mikesumpwccom
16
httpwwwpwccomauconsultingmerger-acquisitions-integrationindexhtm
Thank you
Introduction
2
GRAM
The MampA market ndash exampleshellip
Lest we forgethellip
4
Merger Integration Explained
5
Link
A quiz to beginhellip
6
bull ___ of acquirers believe that they create value from their MampAs
bull hellipbut the evidence shows that _____ fail
bull Almost ___ of synergies are paid in the purchase price
bull ___ of acquirers fail to deliver their synergy targets
bull It takes acquirers __ months on average to feel in control
bull Over __ of failures are blamed on lsquocultural incompatibilityrsquo
bull Number one learning point ndash ldquo_____________rdquo
lsquoThe moral is not that merging is always wrong but that it is riskyrsquo
The Economist
Why do mergers fail
7
Keys to successhellip
8
hellipa blend of lsquohardrsquo and lsquosoftrsquo factors
The critical importance of synergies
9
Destroy value
Va
lue
$M
Price paid Value creation
Synergies
Create value
Dis-synergies
hellipbut remember to protect standalone value
The first 100 days are critical to
success
10
Stakeholder perceptions are formed in this
period and are difficult to change
0 25 50 100
Employees
Board
Shareholders
Customers
Gone
Conflict
Switching
Critical
Va
lue
Typical results of poor integration management
Summary balance is the key
11
Maintaining strong control
over the costs benefit
delivery quality and scope
of the programme
Ensuring there are clear
objectives and targets to focus
activity and critical resources
on areas that add the most
value
Balancing integration with driving core business performance
Effective management
of PEOPLE through a
time of uncertainty
Objective challenge and
robust process to minimise
expected RISK
Maximise the expected
VALUE through focus on
areas of benefit
Delivering the benefits
whilst ensuring that
focus is maintained on
core businessrsquos growth
opportunities business
as usual activity and
other change
programmes
Managing key stakeholders
through the change your
employees your clients your
regulators
Source PwC global merger integration methodology
MampA Integration
Exercise Coles7-Eleven
bull Coles has announced an
agreement to acquire the
entire business of 7-Eleven in
Australia
bull The deal is expected to close
in 2 months
bull Until then the businesses
remain separate competitors
with limited access to people amp
data
Teams
1 Coles CEO
2 7-Eleven CEO
3 Coles Integration Director
4 Stores amp Brand
5 Products amp Purchasing
6 Supply Chain
7 Finance
8 IT
9 People amp HR
13
Planning Merger Integration
Exercise Coles7-Eleven
Questions
1 How are you feeling
2 What are your key
priorities in this phase
3 What is keeping you
awake at night
15 mins to consider each team to play back for 3 mins
What does good look like
Integration Principle Desired outcome
1 Accelerate the
transition
ldquoThe integration had a clear sense of pace and
momentum right through to the end Activities were
completed on time or ahead of schedulerdquo
2 Define the integration
strategy
ldquoThe desired outcomes and strategic direction were
clear Decisions were made on a timely basis to enable
rapid progressrdquo
3 Focus on priority
initiatives
ldquoPriorities were clear and focus was paid to key value
driversrdquo
4 Plan the integration
and prepare for Day
One early
ldquoPlanning started early well in advance of Day 1 A
clear plan and timeline were put in placerdquo
5 Communicate with all
stakeholders
ldquoA wide range of stakeholders were engaged
throughout the process in 2-way discussion which
helped to shape the approachrdquo
6 Establish leadership
at all levels
ldquoRoles accountabilities and decision making processes
were clear People took responsibility and delivered to
promiserdquo
7 Manage the
integration as a
business process
ldquoThe process was rigorous enough to add value without
lsquogetting in the wayrsquo or being inflexiblerdquo
PwC Global MampA
Integration Methodology
-Best Practice Principles
Key take-aways
1 Two-thirds of mergers fail - usually because integration fails
2 Start early to ensure a running start on Day 1
3 Dedicate resources and take integration seriously
4 The power of balance ndash value risk people and BAU
5 Pace with structure
6 Communication culture leadership
15
Questions
Mike Sum
Partner PwC
Office +61 (3) 8603 5924
Mobile +61 420 314 505
mikesumpwccom
16
httpwwwpwccomauconsultingmerger-acquisitions-integrationindexhtm
Thank you
The MampA market ndash exampleshellip
Lest we forgethellip
4
Merger Integration Explained
5
Link
A quiz to beginhellip
6
bull ___ of acquirers believe that they create value from their MampAs
bull hellipbut the evidence shows that _____ fail
bull Almost ___ of synergies are paid in the purchase price
bull ___ of acquirers fail to deliver their synergy targets
bull It takes acquirers __ months on average to feel in control
bull Over __ of failures are blamed on lsquocultural incompatibilityrsquo
bull Number one learning point ndash ldquo_____________rdquo
lsquoThe moral is not that merging is always wrong but that it is riskyrsquo
The Economist
Why do mergers fail
7
Keys to successhellip
8
hellipa blend of lsquohardrsquo and lsquosoftrsquo factors
The critical importance of synergies
9
Destroy value
Va
lue
$M
Price paid Value creation
Synergies
Create value
Dis-synergies
hellipbut remember to protect standalone value
The first 100 days are critical to
success
10
Stakeholder perceptions are formed in this
period and are difficult to change
0 25 50 100
Employees
Board
Shareholders
Customers
Gone
Conflict
Switching
Critical
Va
lue
Typical results of poor integration management
Summary balance is the key
11
Maintaining strong control
over the costs benefit
delivery quality and scope
of the programme
Ensuring there are clear
objectives and targets to focus
activity and critical resources
on areas that add the most
value
Balancing integration with driving core business performance
Effective management
of PEOPLE through a
time of uncertainty
Objective challenge and
robust process to minimise
expected RISK
Maximise the expected
VALUE through focus on
areas of benefit
Delivering the benefits
whilst ensuring that
focus is maintained on
core businessrsquos growth
opportunities business
as usual activity and
other change
programmes
Managing key stakeholders
through the change your
employees your clients your
regulators
Source PwC global merger integration methodology
MampA Integration
Exercise Coles7-Eleven
bull Coles has announced an
agreement to acquire the
entire business of 7-Eleven in
Australia
bull The deal is expected to close
in 2 months
bull Until then the businesses
remain separate competitors
with limited access to people amp
data
Teams
1 Coles CEO
2 7-Eleven CEO
3 Coles Integration Director
4 Stores amp Brand
5 Products amp Purchasing
6 Supply Chain
7 Finance
8 IT
9 People amp HR
13
Planning Merger Integration
Exercise Coles7-Eleven
Questions
1 How are you feeling
2 What are your key
priorities in this phase
3 What is keeping you
awake at night
15 mins to consider each team to play back for 3 mins
What does good look like
Integration Principle Desired outcome
1 Accelerate the
transition
ldquoThe integration had a clear sense of pace and
momentum right through to the end Activities were
completed on time or ahead of schedulerdquo
2 Define the integration
strategy
ldquoThe desired outcomes and strategic direction were
clear Decisions were made on a timely basis to enable
rapid progressrdquo
3 Focus on priority
initiatives
ldquoPriorities were clear and focus was paid to key value
driversrdquo
4 Plan the integration
and prepare for Day
One early
ldquoPlanning started early well in advance of Day 1 A
clear plan and timeline were put in placerdquo
5 Communicate with all
stakeholders
ldquoA wide range of stakeholders were engaged
throughout the process in 2-way discussion which
helped to shape the approachrdquo
6 Establish leadership
at all levels
ldquoRoles accountabilities and decision making processes
were clear People took responsibility and delivered to
promiserdquo
7 Manage the
integration as a
business process
ldquoThe process was rigorous enough to add value without
lsquogetting in the wayrsquo or being inflexiblerdquo
PwC Global MampA
Integration Methodology
-Best Practice Principles
Key take-aways
1 Two-thirds of mergers fail - usually because integration fails
2 Start early to ensure a running start on Day 1
3 Dedicate resources and take integration seriously
4 The power of balance ndash value risk people and BAU
5 Pace with structure
6 Communication culture leadership
15
Questions
Mike Sum
Partner PwC
Office +61 (3) 8603 5924
Mobile +61 420 314 505
mikesumpwccom
16
httpwwwpwccomauconsultingmerger-acquisitions-integrationindexhtm
Thank you
Lest we forgethellip
4
Merger Integration Explained
5
Link
A quiz to beginhellip
6
bull ___ of acquirers believe that they create value from their MampAs
bull hellipbut the evidence shows that _____ fail
bull Almost ___ of synergies are paid in the purchase price
bull ___ of acquirers fail to deliver their synergy targets
bull It takes acquirers __ months on average to feel in control
bull Over __ of failures are blamed on lsquocultural incompatibilityrsquo
bull Number one learning point ndash ldquo_____________rdquo
lsquoThe moral is not that merging is always wrong but that it is riskyrsquo
The Economist
Why do mergers fail
7
Keys to successhellip
8
hellipa blend of lsquohardrsquo and lsquosoftrsquo factors
The critical importance of synergies
9
Destroy value
Va
lue
$M
Price paid Value creation
Synergies
Create value
Dis-synergies
hellipbut remember to protect standalone value
The first 100 days are critical to
success
10
Stakeholder perceptions are formed in this
period and are difficult to change
0 25 50 100
Employees
Board
Shareholders
Customers
Gone
Conflict
Switching
Critical
Va
lue
Typical results of poor integration management
Summary balance is the key
11
Maintaining strong control
over the costs benefit
delivery quality and scope
of the programme
Ensuring there are clear
objectives and targets to focus
activity and critical resources
on areas that add the most
value
Balancing integration with driving core business performance
Effective management
of PEOPLE through a
time of uncertainty
Objective challenge and
robust process to minimise
expected RISK
Maximise the expected
VALUE through focus on
areas of benefit
Delivering the benefits
whilst ensuring that
focus is maintained on
core businessrsquos growth
opportunities business
as usual activity and
other change
programmes
Managing key stakeholders
through the change your
employees your clients your
regulators
Source PwC global merger integration methodology
MampA Integration
Exercise Coles7-Eleven
bull Coles has announced an
agreement to acquire the
entire business of 7-Eleven in
Australia
bull The deal is expected to close
in 2 months
bull Until then the businesses
remain separate competitors
with limited access to people amp
data
Teams
1 Coles CEO
2 7-Eleven CEO
3 Coles Integration Director
4 Stores amp Brand
5 Products amp Purchasing
6 Supply Chain
7 Finance
8 IT
9 People amp HR
13
Planning Merger Integration
Exercise Coles7-Eleven
Questions
1 How are you feeling
2 What are your key
priorities in this phase
3 What is keeping you
awake at night
15 mins to consider each team to play back for 3 mins
What does good look like
Integration Principle Desired outcome
1 Accelerate the
transition
ldquoThe integration had a clear sense of pace and
momentum right through to the end Activities were
completed on time or ahead of schedulerdquo
2 Define the integration
strategy
ldquoThe desired outcomes and strategic direction were
clear Decisions were made on a timely basis to enable
rapid progressrdquo
3 Focus on priority
initiatives
ldquoPriorities were clear and focus was paid to key value
driversrdquo
4 Plan the integration
and prepare for Day
One early
ldquoPlanning started early well in advance of Day 1 A
clear plan and timeline were put in placerdquo
5 Communicate with all
stakeholders
ldquoA wide range of stakeholders were engaged
throughout the process in 2-way discussion which
helped to shape the approachrdquo
6 Establish leadership
at all levels
ldquoRoles accountabilities and decision making processes
were clear People took responsibility and delivered to
promiserdquo
7 Manage the
integration as a
business process
ldquoThe process was rigorous enough to add value without
lsquogetting in the wayrsquo or being inflexiblerdquo
PwC Global MampA
Integration Methodology
-Best Practice Principles
Key take-aways
1 Two-thirds of mergers fail - usually because integration fails
2 Start early to ensure a running start on Day 1
3 Dedicate resources and take integration seriously
4 The power of balance ndash value risk people and BAU
5 Pace with structure
6 Communication culture leadership
15
Questions
Mike Sum
Partner PwC
Office +61 (3) 8603 5924
Mobile +61 420 314 505
mikesumpwccom
16
httpwwwpwccomauconsultingmerger-acquisitions-integrationindexhtm
Thank you
Merger Integration Explained
5
Link
A quiz to beginhellip
6
bull ___ of acquirers believe that they create value from their MampAs
bull hellipbut the evidence shows that _____ fail
bull Almost ___ of synergies are paid in the purchase price
bull ___ of acquirers fail to deliver their synergy targets
bull It takes acquirers __ months on average to feel in control
bull Over __ of failures are blamed on lsquocultural incompatibilityrsquo
bull Number one learning point ndash ldquo_____________rdquo
lsquoThe moral is not that merging is always wrong but that it is riskyrsquo
The Economist
Why do mergers fail
7
Keys to successhellip
8
hellipa blend of lsquohardrsquo and lsquosoftrsquo factors
The critical importance of synergies
9
Destroy value
Va
lue
$M
Price paid Value creation
Synergies
Create value
Dis-synergies
hellipbut remember to protect standalone value
The first 100 days are critical to
success
10
Stakeholder perceptions are formed in this
period and are difficult to change
0 25 50 100
Employees
Board
Shareholders
Customers
Gone
Conflict
Switching
Critical
Va
lue
Typical results of poor integration management
Summary balance is the key
11
Maintaining strong control
over the costs benefit
delivery quality and scope
of the programme
Ensuring there are clear
objectives and targets to focus
activity and critical resources
on areas that add the most
value
Balancing integration with driving core business performance
Effective management
of PEOPLE through a
time of uncertainty
Objective challenge and
robust process to minimise
expected RISK
Maximise the expected
VALUE through focus on
areas of benefit
Delivering the benefits
whilst ensuring that
focus is maintained on
core businessrsquos growth
opportunities business
as usual activity and
other change
programmes
Managing key stakeholders
through the change your
employees your clients your
regulators
Source PwC global merger integration methodology
MampA Integration
Exercise Coles7-Eleven
bull Coles has announced an
agreement to acquire the
entire business of 7-Eleven in
Australia
bull The deal is expected to close
in 2 months
bull Until then the businesses
remain separate competitors
with limited access to people amp
data
Teams
1 Coles CEO
2 7-Eleven CEO
3 Coles Integration Director
4 Stores amp Brand
5 Products amp Purchasing
6 Supply Chain
7 Finance
8 IT
9 People amp HR
13
Planning Merger Integration
Exercise Coles7-Eleven
Questions
1 How are you feeling
2 What are your key
priorities in this phase
3 What is keeping you
awake at night
15 mins to consider each team to play back for 3 mins
What does good look like
Integration Principle Desired outcome
1 Accelerate the
transition
ldquoThe integration had a clear sense of pace and
momentum right through to the end Activities were
completed on time or ahead of schedulerdquo
2 Define the integration
strategy
ldquoThe desired outcomes and strategic direction were
clear Decisions were made on a timely basis to enable
rapid progressrdquo
3 Focus on priority
initiatives
ldquoPriorities were clear and focus was paid to key value
driversrdquo
4 Plan the integration
and prepare for Day
One early
ldquoPlanning started early well in advance of Day 1 A
clear plan and timeline were put in placerdquo
5 Communicate with all
stakeholders
ldquoA wide range of stakeholders were engaged
throughout the process in 2-way discussion which
helped to shape the approachrdquo
6 Establish leadership
at all levels
ldquoRoles accountabilities and decision making processes
were clear People took responsibility and delivered to
promiserdquo
7 Manage the
integration as a
business process
ldquoThe process was rigorous enough to add value without
lsquogetting in the wayrsquo or being inflexiblerdquo
PwC Global MampA
Integration Methodology
-Best Practice Principles
Key take-aways
1 Two-thirds of mergers fail - usually because integration fails
2 Start early to ensure a running start on Day 1
3 Dedicate resources and take integration seriously
4 The power of balance ndash value risk people and BAU
5 Pace with structure
6 Communication culture leadership
15
Questions
Mike Sum
Partner PwC
Office +61 (3) 8603 5924
Mobile +61 420 314 505
mikesumpwccom
16
httpwwwpwccomauconsultingmerger-acquisitions-integrationindexhtm
Thank you
A quiz to beginhellip
6
bull ___ of acquirers believe that they create value from their MampAs
bull hellipbut the evidence shows that _____ fail
bull Almost ___ of synergies are paid in the purchase price
bull ___ of acquirers fail to deliver their synergy targets
bull It takes acquirers __ months on average to feel in control
bull Over __ of failures are blamed on lsquocultural incompatibilityrsquo
bull Number one learning point ndash ldquo_____________rdquo
lsquoThe moral is not that merging is always wrong but that it is riskyrsquo
The Economist
Why do mergers fail
7
Keys to successhellip
8
hellipa blend of lsquohardrsquo and lsquosoftrsquo factors
The critical importance of synergies
9
Destroy value
Va
lue
$M
Price paid Value creation
Synergies
Create value
Dis-synergies
hellipbut remember to protect standalone value
The first 100 days are critical to
success
10
Stakeholder perceptions are formed in this
period and are difficult to change
0 25 50 100
Employees
Board
Shareholders
Customers
Gone
Conflict
Switching
Critical
Va
lue
Typical results of poor integration management
Summary balance is the key
11
Maintaining strong control
over the costs benefit
delivery quality and scope
of the programme
Ensuring there are clear
objectives and targets to focus
activity and critical resources
on areas that add the most
value
Balancing integration with driving core business performance
Effective management
of PEOPLE through a
time of uncertainty
Objective challenge and
robust process to minimise
expected RISK
Maximise the expected
VALUE through focus on
areas of benefit
Delivering the benefits
whilst ensuring that
focus is maintained on
core businessrsquos growth
opportunities business
as usual activity and
other change
programmes
Managing key stakeholders
through the change your
employees your clients your
regulators
Source PwC global merger integration methodology
MampA Integration
Exercise Coles7-Eleven
bull Coles has announced an
agreement to acquire the
entire business of 7-Eleven in
Australia
bull The deal is expected to close
in 2 months
bull Until then the businesses
remain separate competitors
with limited access to people amp
data
Teams
1 Coles CEO
2 7-Eleven CEO
3 Coles Integration Director
4 Stores amp Brand
5 Products amp Purchasing
6 Supply Chain
7 Finance
8 IT
9 People amp HR
13
Planning Merger Integration
Exercise Coles7-Eleven
Questions
1 How are you feeling
2 What are your key
priorities in this phase
3 What is keeping you
awake at night
15 mins to consider each team to play back for 3 mins
What does good look like
Integration Principle Desired outcome
1 Accelerate the
transition
ldquoThe integration had a clear sense of pace and
momentum right through to the end Activities were
completed on time or ahead of schedulerdquo
2 Define the integration
strategy
ldquoThe desired outcomes and strategic direction were
clear Decisions were made on a timely basis to enable
rapid progressrdquo
3 Focus on priority
initiatives
ldquoPriorities were clear and focus was paid to key value
driversrdquo
4 Plan the integration
and prepare for Day
One early
ldquoPlanning started early well in advance of Day 1 A
clear plan and timeline were put in placerdquo
5 Communicate with all
stakeholders
ldquoA wide range of stakeholders were engaged
throughout the process in 2-way discussion which
helped to shape the approachrdquo
6 Establish leadership
at all levels
ldquoRoles accountabilities and decision making processes
were clear People took responsibility and delivered to
promiserdquo
7 Manage the
integration as a
business process
ldquoThe process was rigorous enough to add value without
lsquogetting in the wayrsquo or being inflexiblerdquo
PwC Global MampA
Integration Methodology
-Best Practice Principles
Key take-aways
1 Two-thirds of mergers fail - usually because integration fails
2 Start early to ensure a running start on Day 1
3 Dedicate resources and take integration seriously
4 The power of balance ndash value risk people and BAU
5 Pace with structure
6 Communication culture leadership
15
Questions
Mike Sum
Partner PwC
Office +61 (3) 8603 5924
Mobile +61 420 314 505
mikesumpwccom
16
httpwwwpwccomauconsultingmerger-acquisitions-integrationindexhtm
Thank you
Why do mergers fail
7
Keys to successhellip
8
hellipa blend of lsquohardrsquo and lsquosoftrsquo factors
The critical importance of synergies
9
Destroy value
Va
lue
$M
Price paid Value creation
Synergies
Create value
Dis-synergies
hellipbut remember to protect standalone value
The first 100 days are critical to
success
10
Stakeholder perceptions are formed in this
period and are difficult to change
0 25 50 100
Employees
Board
Shareholders
Customers
Gone
Conflict
Switching
Critical
Va
lue
Typical results of poor integration management
Summary balance is the key
11
Maintaining strong control
over the costs benefit
delivery quality and scope
of the programme
Ensuring there are clear
objectives and targets to focus
activity and critical resources
on areas that add the most
value
Balancing integration with driving core business performance
Effective management
of PEOPLE through a
time of uncertainty
Objective challenge and
robust process to minimise
expected RISK
Maximise the expected
VALUE through focus on
areas of benefit
Delivering the benefits
whilst ensuring that
focus is maintained on
core businessrsquos growth
opportunities business
as usual activity and
other change
programmes
Managing key stakeholders
through the change your
employees your clients your
regulators
Source PwC global merger integration methodology
MampA Integration
Exercise Coles7-Eleven
bull Coles has announced an
agreement to acquire the
entire business of 7-Eleven in
Australia
bull The deal is expected to close
in 2 months
bull Until then the businesses
remain separate competitors
with limited access to people amp
data
Teams
1 Coles CEO
2 7-Eleven CEO
3 Coles Integration Director
4 Stores amp Brand
5 Products amp Purchasing
6 Supply Chain
7 Finance
8 IT
9 People amp HR
13
Planning Merger Integration
Exercise Coles7-Eleven
Questions
1 How are you feeling
2 What are your key
priorities in this phase
3 What is keeping you
awake at night
15 mins to consider each team to play back for 3 mins
What does good look like
Integration Principle Desired outcome
1 Accelerate the
transition
ldquoThe integration had a clear sense of pace and
momentum right through to the end Activities were
completed on time or ahead of schedulerdquo
2 Define the integration
strategy
ldquoThe desired outcomes and strategic direction were
clear Decisions were made on a timely basis to enable
rapid progressrdquo
3 Focus on priority
initiatives
ldquoPriorities were clear and focus was paid to key value
driversrdquo
4 Plan the integration
and prepare for Day
One early
ldquoPlanning started early well in advance of Day 1 A
clear plan and timeline were put in placerdquo
5 Communicate with all
stakeholders
ldquoA wide range of stakeholders were engaged
throughout the process in 2-way discussion which
helped to shape the approachrdquo
6 Establish leadership
at all levels
ldquoRoles accountabilities and decision making processes
were clear People took responsibility and delivered to
promiserdquo
7 Manage the
integration as a
business process
ldquoThe process was rigorous enough to add value without
lsquogetting in the wayrsquo or being inflexiblerdquo
PwC Global MampA
Integration Methodology
-Best Practice Principles
Key take-aways
1 Two-thirds of mergers fail - usually because integration fails
2 Start early to ensure a running start on Day 1
3 Dedicate resources and take integration seriously
4 The power of balance ndash value risk people and BAU
5 Pace with structure
6 Communication culture leadership
15
Questions
Mike Sum
Partner PwC
Office +61 (3) 8603 5924
Mobile +61 420 314 505
mikesumpwccom
16
httpwwwpwccomauconsultingmerger-acquisitions-integrationindexhtm
Thank you
Keys to successhellip
8
hellipa blend of lsquohardrsquo and lsquosoftrsquo factors
The critical importance of synergies
9
Destroy value
Va
lue
$M
Price paid Value creation
Synergies
Create value
Dis-synergies
hellipbut remember to protect standalone value
The first 100 days are critical to
success
10
Stakeholder perceptions are formed in this
period and are difficult to change
0 25 50 100
Employees
Board
Shareholders
Customers
Gone
Conflict
Switching
Critical
Va
lue
Typical results of poor integration management
Summary balance is the key
11
Maintaining strong control
over the costs benefit
delivery quality and scope
of the programme
Ensuring there are clear
objectives and targets to focus
activity and critical resources
on areas that add the most
value
Balancing integration with driving core business performance
Effective management
of PEOPLE through a
time of uncertainty
Objective challenge and
robust process to minimise
expected RISK
Maximise the expected
VALUE through focus on
areas of benefit
Delivering the benefits
whilst ensuring that
focus is maintained on
core businessrsquos growth
opportunities business
as usual activity and
other change
programmes
Managing key stakeholders
through the change your
employees your clients your
regulators
Source PwC global merger integration methodology
MampA Integration
Exercise Coles7-Eleven
bull Coles has announced an
agreement to acquire the
entire business of 7-Eleven in
Australia
bull The deal is expected to close
in 2 months
bull Until then the businesses
remain separate competitors
with limited access to people amp
data
Teams
1 Coles CEO
2 7-Eleven CEO
3 Coles Integration Director
4 Stores amp Brand
5 Products amp Purchasing
6 Supply Chain
7 Finance
8 IT
9 People amp HR
13
Planning Merger Integration
Exercise Coles7-Eleven
Questions
1 How are you feeling
2 What are your key
priorities in this phase
3 What is keeping you
awake at night
15 mins to consider each team to play back for 3 mins
What does good look like
Integration Principle Desired outcome
1 Accelerate the
transition
ldquoThe integration had a clear sense of pace and
momentum right through to the end Activities were
completed on time or ahead of schedulerdquo
2 Define the integration
strategy
ldquoThe desired outcomes and strategic direction were
clear Decisions were made on a timely basis to enable
rapid progressrdquo
3 Focus on priority
initiatives
ldquoPriorities were clear and focus was paid to key value
driversrdquo
4 Plan the integration
and prepare for Day
One early
ldquoPlanning started early well in advance of Day 1 A
clear plan and timeline were put in placerdquo
5 Communicate with all
stakeholders
ldquoA wide range of stakeholders were engaged
throughout the process in 2-way discussion which
helped to shape the approachrdquo
6 Establish leadership
at all levels
ldquoRoles accountabilities and decision making processes
were clear People took responsibility and delivered to
promiserdquo
7 Manage the
integration as a
business process
ldquoThe process was rigorous enough to add value without
lsquogetting in the wayrsquo or being inflexiblerdquo
PwC Global MampA
Integration Methodology
-Best Practice Principles
Key take-aways
1 Two-thirds of mergers fail - usually because integration fails
2 Start early to ensure a running start on Day 1
3 Dedicate resources and take integration seriously
4 The power of balance ndash value risk people and BAU
5 Pace with structure
6 Communication culture leadership
15
Questions
Mike Sum
Partner PwC
Office +61 (3) 8603 5924
Mobile +61 420 314 505
mikesumpwccom
16
httpwwwpwccomauconsultingmerger-acquisitions-integrationindexhtm
Thank you
The critical importance of synergies
9
Destroy value
Va
lue
$M
Price paid Value creation
Synergies
Create value
Dis-synergies
hellipbut remember to protect standalone value
The first 100 days are critical to
success
10
Stakeholder perceptions are formed in this
period and are difficult to change
0 25 50 100
Employees
Board
Shareholders
Customers
Gone
Conflict
Switching
Critical
Va
lue
Typical results of poor integration management
Summary balance is the key
11
Maintaining strong control
over the costs benefit
delivery quality and scope
of the programme
Ensuring there are clear
objectives and targets to focus
activity and critical resources
on areas that add the most
value
Balancing integration with driving core business performance
Effective management
of PEOPLE through a
time of uncertainty
Objective challenge and
robust process to minimise
expected RISK
Maximise the expected
VALUE through focus on
areas of benefit
Delivering the benefits
whilst ensuring that
focus is maintained on
core businessrsquos growth
opportunities business
as usual activity and
other change
programmes
Managing key stakeholders
through the change your
employees your clients your
regulators
Source PwC global merger integration methodology
MampA Integration
Exercise Coles7-Eleven
bull Coles has announced an
agreement to acquire the
entire business of 7-Eleven in
Australia
bull The deal is expected to close
in 2 months
bull Until then the businesses
remain separate competitors
with limited access to people amp
data
Teams
1 Coles CEO
2 7-Eleven CEO
3 Coles Integration Director
4 Stores amp Brand
5 Products amp Purchasing
6 Supply Chain
7 Finance
8 IT
9 People amp HR
13
Planning Merger Integration
Exercise Coles7-Eleven
Questions
1 How are you feeling
2 What are your key
priorities in this phase
3 What is keeping you
awake at night
15 mins to consider each team to play back for 3 mins
What does good look like
Integration Principle Desired outcome
1 Accelerate the
transition
ldquoThe integration had a clear sense of pace and
momentum right through to the end Activities were
completed on time or ahead of schedulerdquo
2 Define the integration
strategy
ldquoThe desired outcomes and strategic direction were
clear Decisions were made on a timely basis to enable
rapid progressrdquo
3 Focus on priority
initiatives
ldquoPriorities were clear and focus was paid to key value
driversrdquo
4 Plan the integration
and prepare for Day
One early
ldquoPlanning started early well in advance of Day 1 A
clear plan and timeline were put in placerdquo
5 Communicate with all
stakeholders
ldquoA wide range of stakeholders were engaged
throughout the process in 2-way discussion which
helped to shape the approachrdquo
6 Establish leadership
at all levels
ldquoRoles accountabilities and decision making processes
were clear People took responsibility and delivered to
promiserdquo
7 Manage the
integration as a
business process
ldquoThe process was rigorous enough to add value without
lsquogetting in the wayrsquo or being inflexiblerdquo
PwC Global MampA
Integration Methodology
-Best Practice Principles
Key take-aways
1 Two-thirds of mergers fail - usually because integration fails
2 Start early to ensure a running start on Day 1
3 Dedicate resources and take integration seriously
4 The power of balance ndash value risk people and BAU
5 Pace with structure
6 Communication culture leadership
15
Questions
Mike Sum
Partner PwC
Office +61 (3) 8603 5924
Mobile +61 420 314 505
mikesumpwccom
16
httpwwwpwccomauconsultingmerger-acquisitions-integrationindexhtm
Thank you
The first 100 days are critical to
success
10
Stakeholder perceptions are formed in this
period and are difficult to change
0 25 50 100
Employees
Board
Shareholders
Customers
Gone
Conflict
Switching
Critical
Va
lue
Typical results of poor integration management
Summary balance is the key
11
Maintaining strong control
over the costs benefit
delivery quality and scope
of the programme
Ensuring there are clear
objectives and targets to focus
activity and critical resources
on areas that add the most
value
Balancing integration with driving core business performance
Effective management
of PEOPLE through a
time of uncertainty
Objective challenge and
robust process to minimise
expected RISK
Maximise the expected
VALUE through focus on
areas of benefit
Delivering the benefits
whilst ensuring that
focus is maintained on
core businessrsquos growth
opportunities business
as usual activity and
other change
programmes
Managing key stakeholders
through the change your
employees your clients your
regulators
Source PwC global merger integration methodology
MampA Integration
Exercise Coles7-Eleven
bull Coles has announced an
agreement to acquire the
entire business of 7-Eleven in
Australia
bull The deal is expected to close
in 2 months
bull Until then the businesses
remain separate competitors
with limited access to people amp
data
Teams
1 Coles CEO
2 7-Eleven CEO
3 Coles Integration Director
4 Stores amp Brand
5 Products amp Purchasing
6 Supply Chain
7 Finance
8 IT
9 People amp HR
13
Planning Merger Integration
Exercise Coles7-Eleven
Questions
1 How are you feeling
2 What are your key
priorities in this phase
3 What is keeping you
awake at night
15 mins to consider each team to play back for 3 mins
What does good look like
Integration Principle Desired outcome
1 Accelerate the
transition
ldquoThe integration had a clear sense of pace and
momentum right through to the end Activities were
completed on time or ahead of schedulerdquo
2 Define the integration
strategy
ldquoThe desired outcomes and strategic direction were
clear Decisions were made on a timely basis to enable
rapid progressrdquo
3 Focus on priority
initiatives
ldquoPriorities were clear and focus was paid to key value
driversrdquo
4 Plan the integration
and prepare for Day
One early
ldquoPlanning started early well in advance of Day 1 A
clear plan and timeline were put in placerdquo
5 Communicate with all
stakeholders
ldquoA wide range of stakeholders were engaged
throughout the process in 2-way discussion which
helped to shape the approachrdquo
6 Establish leadership
at all levels
ldquoRoles accountabilities and decision making processes
were clear People took responsibility and delivered to
promiserdquo
7 Manage the
integration as a
business process
ldquoThe process was rigorous enough to add value without
lsquogetting in the wayrsquo or being inflexiblerdquo
PwC Global MampA
Integration Methodology
-Best Practice Principles
Key take-aways
1 Two-thirds of mergers fail - usually because integration fails
2 Start early to ensure a running start on Day 1
3 Dedicate resources and take integration seriously
4 The power of balance ndash value risk people and BAU
5 Pace with structure
6 Communication culture leadership
15
Questions
Mike Sum
Partner PwC
Office +61 (3) 8603 5924
Mobile +61 420 314 505
mikesumpwccom
16
httpwwwpwccomauconsultingmerger-acquisitions-integrationindexhtm
Thank you
Summary balance is the key
11
Maintaining strong control
over the costs benefit
delivery quality and scope
of the programme
Ensuring there are clear
objectives and targets to focus
activity and critical resources
on areas that add the most
value
Balancing integration with driving core business performance
Effective management
of PEOPLE through a
time of uncertainty
Objective challenge and
robust process to minimise
expected RISK
Maximise the expected
VALUE through focus on
areas of benefit
Delivering the benefits
whilst ensuring that
focus is maintained on
core businessrsquos growth
opportunities business
as usual activity and
other change
programmes
Managing key stakeholders
through the change your
employees your clients your
regulators
Source PwC global merger integration methodology
MampA Integration
Exercise Coles7-Eleven
bull Coles has announced an
agreement to acquire the
entire business of 7-Eleven in
Australia
bull The deal is expected to close
in 2 months
bull Until then the businesses
remain separate competitors
with limited access to people amp
data
Teams
1 Coles CEO
2 7-Eleven CEO
3 Coles Integration Director
4 Stores amp Brand
5 Products amp Purchasing
6 Supply Chain
7 Finance
8 IT
9 People amp HR
13
Planning Merger Integration
Exercise Coles7-Eleven
Questions
1 How are you feeling
2 What are your key
priorities in this phase
3 What is keeping you
awake at night
15 mins to consider each team to play back for 3 mins
What does good look like
Integration Principle Desired outcome
1 Accelerate the
transition
ldquoThe integration had a clear sense of pace and
momentum right through to the end Activities were
completed on time or ahead of schedulerdquo
2 Define the integration
strategy
ldquoThe desired outcomes and strategic direction were
clear Decisions were made on a timely basis to enable
rapid progressrdquo
3 Focus on priority
initiatives
ldquoPriorities were clear and focus was paid to key value
driversrdquo
4 Plan the integration
and prepare for Day
One early
ldquoPlanning started early well in advance of Day 1 A
clear plan and timeline were put in placerdquo
5 Communicate with all
stakeholders
ldquoA wide range of stakeholders were engaged
throughout the process in 2-way discussion which
helped to shape the approachrdquo
6 Establish leadership
at all levels
ldquoRoles accountabilities and decision making processes
were clear People took responsibility and delivered to
promiserdquo
7 Manage the
integration as a
business process
ldquoThe process was rigorous enough to add value without
lsquogetting in the wayrsquo or being inflexiblerdquo
PwC Global MampA
Integration Methodology
-Best Practice Principles
Key take-aways
1 Two-thirds of mergers fail - usually because integration fails
2 Start early to ensure a running start on Day 1
3 Dedicate resources and take integration seriously
4 The power of balance ndash value risk people and BAU
5 Pace with structure
6 Communication culture leadership
15
Questions
Mike Sum
Partner PwC
Office +61 (3) 8603 5924
Mobile +61 420 314 505
mikesumpwccom
16
httpwwwpwccomauconsultingmerger-acquisitions-integrationindexhtm
Thank you
MampA Integration
Exercise Coles7-Eleven
bull Coles has announced an
agreement to acquire the
entire business of 7-Eleven in
Australia
bull The deal is expected to close
in 2 months
bull Until then the businesses
remain separate competitors
with limited access to people amp
data
Teams
1 Coles CEO
2 7-Eleven CEO
3 Coles Integration Director
4 Stores amp Brand
5 Products amp Purchasing
6 Supply Chain
7 Finance
8 IT
9 People amp HR
13
Planning Merger Integration
Exercise Coles7-Eleven
Questions
1 How are you feeling
2 What are your key
priorities in this phase
3 What is keeping you
awake at night
15 mins to consider each team to play back for 3 mins
What does good look like
Integration Principle Desired outcome
1 Accelerate the
transition
ldquoThe integration had a clear sense of pace and
momentum right through to the end Activities were
completed on time or ahead of schedulerdquo
2 Define the integration
strategy
ldquoThe desired outcomes and strategic direction were
clear Decisions were made on a timely basis to enable
rapid progressrdquo
3 Focus on priority
initiatives
ldquoPriorities were clear and focus was paid to key value
driversrdquo
4 Plan the integration
and prepare for Day
One early
ldquoPlanning started early well in advance of Day 1 A
clear plan and timeline were put in placerdquo
5 Communicate with all
stakeholders
ldquoA wide range of stakeholders were engaged
throughout the process in 2-way discussion which
helped to shape the approachrdquo
6 Establish leadership
at all levels
ldquoRoles accountabilities and decision making processes
were clear People took responsibility and delivered to
promiserdquo
7 Manage the
integration as a
business process
ldquoThe process was rigorous enough to add value without
lsquogetting in the wayrsquo or being inflexiblerdquo
PwC Global MampA
Integration Methodology
-Best Practice Principles
Key take-aways
1 Two-thirds of mergers fail - usually because integration fails
2 Start early to ensure a running start on Day 1
3 Dedicate resources and take integration seriously
4 The power of balance ndash value risk people and BAU
5 Pace with structure
6 Communication culture leadership
15
Questions
Mike Sum
Partner PwC
Office +61 (3) 8603 5924
Mobile +61 420 314 505
mikesumpwccom
16
httpwwwpwccomauconsultingmerger-acquisitions-integrationindexhtm
Thank you
Teams
1 Coles CEO
2 7-Eleven CEO
3 Coles Integration Director
4 Stores amp Brand
5 Products amp Purchasing
6 Supply Chain
7 Finance
8 IT
9 People amp HR
13
Planning Merger Integration
Exercise Coles7-Eleven
Questions
1 How are you feeling
2 What are your key
priorities in this phase
3 What is keeping you
awake at night
15 mins to consider each team to play back for 3 mins
What does good look like
Integration Principle Desired outcome
1 Accelerate the
transition
ldquoThe integration had a clear sense of pace and
momentum right through to the end Activities were
completed on time or ahead of schedulerdquo
2 Define the integration
strategy
ldquoThe desired outcomes and strategic direction were
clear Decisions were made on a timely basis to enable
rapid progressrdquo
3 Focus on priority
initiatives
ldquoPriorities were clear and focus was paid to key value
driversrdquo
4 Plan the integration
and prepare for Day
One early
ldquoPlanning started early well in advance of Day 1 A
clear plan and timeline were put in placerdquo
5 Communicate with all
stakeholders
ldquoA wide range of stakeholders were engaged
throughout the process in 2-way discussion which
helped to shape the approachrdquo
6 Establish leadership
at all levels
ldquoRoles accountabilities and decision making processes
were clear People took responsibility and delivered to
promiserdquo
7 Manage the
integration as a
business process
ldquoThe process was rigorous enough to add value without
lsquogetting in the wayrsquo or being inflexiblerdquo
PwC Global MampA
Integration Methodology
-Best Practice Principles
Key take-aways
1 Two-thirds of mergers fail - usually because integration fails
2 Start early to ensure a running start on Day 1
3 Dedicate resources and take integration seriously
4 The power of balance ndash value risk people and BAU
5 Pace with structure
6 Communication culture leadership
15
Questions
Mike Sum
Partner PwC
Office +61 (3) 8603 5924
Mobile +61 420 314 505
mikesumpwccom
16
httpwwwpwccomauconsultingmerger-acquisitions-integrationindexhtm
Thank you
What does good look like
Integration Principle Desired outcome
1 Accelerate the
transition
ldquoThe integration had a clear sense of pace and
momentum right through to the end Activities were
completed on time or ahead of schedulerdquo
2 Define the integration
strategy
ldquoThe desired outcomes and strategic direction were
clear Decisions were made on a timely basis to enable
rapid progressrdquo
3 Focus on priority
initiatives
ldquoPriorities were clear and focus was paid to key value
driversrdquo
4 Plan the integration
and prepare for Day
One early
ldquoPlanning started early well in advance of Day 1 A
clear plan and timeline were put in placerdquo
5 Communicate with all
stakeholders
ldquoA wide range of stakeholders were engaged
throughout the process in 2-way discussion which
helped to shape the approachrdquo
6 Establish leadership
at all levels
ldquoRoles accountabilities and decision making processes
were clear People took responsibility and delivered to
promiserdquo
7 Manage the
integration as a
business process
ldquoThe process was rigorous enough to add value without
lsquogetting in the wayrsquo or being inflexiblerdquo
PwC Global MampA
Integration Methodology
-Best Practice Principles
Key take-aways
1 Two-thirds of mergers fail - usually because integration fails
2 Start early to ensure a running start on Day 1
3 Dedicate resources and take integration seriously
4 The power of balance ndash value risk people and BAU
5 Pace with structure
6 Communication culture leadership
15
Questions
Mike Sum
Partner PwC
Office +61 (3) 8603 5924
Mobile +61 420 314 505
mikesumpwccom
16
httpwwwpwccomauconsultingmerger-acquisitions-integrationindexhtm
Thank you
Key take-aways
1 Two-thirds of mergers fail - usually because integration fails
2 Start early to ensure a running start on Day 1
3 Dedicate resources and take integration seriously
4 The power of balance ndash value risk people and BAU
5 Pace with structure
6 Communication culture leadership
15
Questions
Mike Sum
Partner PwC
Office +61 (3) 8603 5924
Mobile +61 420 314 505
mikesumpwccom
16
httpwwwpwccomauconsultingmerger-acquisitions-integrationindexhtm
Thank you
Questions
Mike Sum
Partner PwC
Office +61 (3) 8603 5924
Mobile +61 420 314 505
mikesumpwccom
16
httpwwwpwccomauconsultingmerger-acquisitions-integrationindexhtm
Thank you