Mobility and transactions - EY€¦ · Mobility and transactions A look at the critical role global...

Mobility and transactions A look at the critical role global mobility plays in transactions

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Agenda for today’s discussion

► Introductions ► Common transaction issues and challenges ► Sharing recent experiences

► Microsoft ► Nokia acquisition

► eBay ► PayPal separation

► Bayer ► Covestro spin-off

Common transaction issues and challenges Policy considerations

Consider “white paper”

approach

Policy

Assessment Determine what

changes need to be implemented

Common transaction issues and challenges Guiding principles

Continuing with ongoing operations to support the business

Proactive communications

Ensuring compliance

Project management office (PMO) –

mobility as a separate work

stream

Identify potential areas of risk to

go-live

Spin-off

(i.e., clone and go?)

Establishing guiding principles

Understanding the core deal terms

How to handle ongoing changes

Common transaction issues and challenges Typical mobility focus areas

Employment law Relocation

Typical mobility focus areas

Tax Immigration

Common transaction issues and challenges Interdependencies

Systems Corporate tax/ legal entity

Redundancies Corporate functions Leadership changes

Functional interdependencies

Workforce planning/ talent management

HR – rewards, benefits, etc.

Finance – accounting

payroll

Some of mobility’s top goals?

Top goals

Ensure all foreign employees retain their immigration and work status with minimal disruption for these employees and their families

Company and employee compliance with

government notification requirements

Identify future improvement opportunities and best practices

Employee experience – proactively communicate changes required to support separation/acquisition with a special focus on top executive talent

Assist leadership in bringing resolution to any outstanding tax compliance or risk matters involving the globally mobile population

Avoiding surprises to employees and to the

business

Microsoft – acquisition

Acquisition: Microsoft case study

Slide courtesy of Microsoft

eBay – separation

eBay case study – eBay/PayPal Separation

Successful merger Successful separation

eBay PayPal eBay PayPal

October 2002 17 July 2015

Slide courtesy of eBay

Separation: eBay case study Primary focuses

Project planning

Employee communication

Clone and Go

approach

Execution


Separation: eBay case study Project planning

► Project planning ► General PM approach ► Identify departmental

interdependencies ► Map out execution timeline ► RIF management ► Identify compliance risks ► Vendor issues


Separation: eBay case study Employee communication

Employee communication ► Transparency ► Planned, targeted, regular

communication ► Increased leadership/executive

presence ► Branding ► Logistics ► Compensation and benefits

► The human element ► Emotional experience ► Change management discussions ► Team and Office activities


Separation: eBay case study Execution

Execution ► Global business stand-ups ► FP&A alignment ► Data transition and

retention ► Vendor implementations ► Testing (internal and

external systems) ► Compliance management ► Mobility team cross training


Bayer – spin-off

Spin-off: Bayer case study Going forward as two separate companies

Life Sciences

• High and further increasing investment requirements in R&D and commercialization

• Funding needs for inorganic growth to participate in industry consolidation

• Significant investments into capacity expansions

• Continuous need for significant capacity expansions to maintain scale

• Need for further production process improvements to maintain cost leadership

• Opportunity for more active portfolio management

MaterialScience

Funding of high investment needs in Life Sciences, with consistently better returns, limits the availability of resources for MaterialScience New to develop its own leadership position and portfolio. !

Slide courtesy of Bayer

Spin-off: Bayer case study Proportion of sales, profit, workforce, assignees - Key data 2014

North America 22%**

38%** Asia/Pacific

28%**

SALES worldwide

€ 11.7 bn 28%*

America, Africa, Middle East

12%**

Workforce 17.000 empl

14%*

PROFIT € 1.19 bn***

14%*

* % in comparison with Bayer before carve out

** % of Total Sales *** Earnings before interest, taxes,

depreciation and amortization (EBITDA) excluding non-recurring items

Assignees 250 20%*

Europe


Spin-off: Bayer case study Carve out – key elements

► Business Market Leader 2015 – very profitable year Positive spirit in company Experience with Lanxess carve-out in 2005

► Short timeline – announcement in Oct 2014

► No business disruption

Polyurethanes Polycarbonates Coatings Basic chemicals

► HR/Mobility specific One global HR system One unique relocation provider

► Many cross-subgroup moves ► Mobility Project on-going


Spin-off: Bayer case study Carve out – approach

► Business ► Independent company on Sept 1st 2015 ► IPO started on Oct 2nd 2015 ► Clone & Go approach ► Operational readiness as main goal with focus on 3 pillars: Process, IT

and organisation

► HR/Mobility specifics ► Duplicate contracts with all external providers for continuity (max. 2 years) ► Develop HR organisation following Bayer structure with Local Mobility

contacts ► Copy all relevant assignees to the new global system ► Align billing procedure with accounting


Spin-off: Bayer case study Carve out – challenges

► Business ► New organisation with proper expertise – 800 positions to be filled ► Data privacy regulation between Bayer and Covestro

► HR/Mobility specifics: ► On-going Mobility project at Bayer ► Completeness of vendor agreements ► Get clear authorisation list with assignees transferred ► Update of work permit – late registration ► Communication to expatriates


Spin-off: Bayer case study Bayer Mobility project – main challenge

► Prioritization 1. Operational readiness 2. Compliance 3. Strategy

2015 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan

Phase 1 Phase 2 Phase 3

01/09/2015

Design Implementation Policy review

New billing process

Global Compensation Management

Activity

1

2

3


Questions?

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