Cross-Border Mergers and Acquisitions

✍ Scribed by Scott C. Whitaker

• Publisher: Wiley
• Year: 2016
• Tongue: English
• Leaves: 467
• Series: Wiley Finance Series
• Edition: 1
• Category: Library

✦ Synopsis

Navigate cross border M&A for a flawless integration execution

Cross Border Mergers and Acquisitions is a practical toolbox for corporate strategy and development professionals dealing with the many challenges involved in cross border M&A. With a detailed discussion of key market specifics and broadly-applicable critical insight, this book demystifies the cross border M&A process and provides a host of practical tools that ease strategic implementation. A geographical overview explains the trends in major M&A markets including Australia, Brazil, China, Russia, the U.K., and the U.S., and industry-specific guidance covers Financial Services, Aerospace and Defense, Health Care, Tech, Manufacturing, and more. Leading experts relate lessons learned while managing actual PMI® processes, and the discussion of cultural impacts and specific situational needs provides deep insight into the type of leadership a flawless integration requires.

Corporate restructuring and internationalization efforts are increasingly relying on cross border mergers and acquisitions. Strategies, motives, and consequences are a complex navigational minefield, but this insightful guide provides solid, actionable guidance for leading a successful integration.

• Understand the region-specific details that make an impact
• Overcome common challenges and manage complex deals
• Gain practical insight and valuable tools for leading integration
• Learn the most current best practices for PMI® processes

Cross border M&A is complex, with myriad challenges and obstacles inherent to the situation. Successful integration and a smooth transition are critical, and there's little wiggle room—it's a situation where you have only one chance to get it right. Cross Border Mergers and Acquisitions is an essential guide to the process, with key tools for execution.

(PMI is a registered mark of Project Management Institute, Inc.)

✦ Table of Contents

Cross-Border Mergers and Acquisitions
Contents
Preface
Part One: Cross-Border Strategy and Deal Planning
Part Two: Cross-Border Culture and Leadership Alignment
Part Three: Cross-Border Integration, Planning, and Execution
Part Four: Unique Cross-Border M&A Transaction Scenarios
About the Author
About the Contributors
Part One Cross-Border Strategy and Deal Planning
Chapter 1 Cross-Border Deal Evolution and Rationale
The Evolution of M&A and Cross-Border Deals
M&A: A Resilient Market
A Geographically Spreading Market
Strong Lasting National Differences
Long-Term Evolution: The Concept of M&A Waves
The Determinants of M&A Waves
Cross-Border Deals and Evolution
Major Specificities of Cross-Border Deals
Strategic Motives
Internationalization of Firms: Strategic Goals Pursued
Cross-Border Deals versus Other Types of Transactions
Differences between Industries
Factors Influencing Cross-Border Deals
Global, Country-, Industry-, and Firm-Specific Factors
Four Different Clusters of Factors
Corporate Finance/Financial Markets/Economy
Governance/Regulations/Institutions
Sociopolitical Parameters
Cultural/Geographical Parameters
Chapter Checklist
Notes
Chapter 2 Cross-Border M&A Strategy and Deal Planning Essentials
M&A Strategy Overview
Inputs to the Acquisition Analysis
M&A Strategy Components
M&A Screening Process
Components of Cross-Border M&A Strategy
Responsibilities and Accountability in the Organization
Resource Planning for the M&A Project
Target’s Management Presentation
Target Company Criteria
Prepare and Plan for a Cross-Border Deal
Chapter Checklist
Chapter 3 Legal, Financial, Social, and Political Interdependencies with Cross-Border Integration
Introduction
Legal Impact
Deal Structure and Legal Entities
Competition Authorities
Sector-Specific Regulation
Financial Impact
Taxation
Financial Control and Reporting
Social Impact
Political Implications
Managing External Risks and Issues
Chapter Checklist
Notes
Chapter 4 Trends and Leading Practices in Global M&A
Global Transaction Trends in the Post–Financial Crisis World
The M&A Life Cycle
Description of the M&A Life Cycle Phases
Transaction Planning and Execution in the M&A Cycle
Linking the M&A Life Cycle Phases to the Strategic Framework and Concepts Described in This Chapter
Developing a Succinct Cross-Border Transaction Strategy
A Traditional Approach to Identify the Gaps Needed for Growth: The GE–McKinsey Nine-Box Matrix
A Modern Approach to Link Strategic Growth and Resource Needs: The Resource Pathways Framework
Cash Value Added, a Proven Concept to Ensure Acquisitions Are Value Accretive
Matching M&A Strategy with Transaction Reality
The Key Reasons That Drive Cross-Border Deals
Key Financing Strategies for Cross-Border Transactions
Selecting the Right Candidate
Managing Deal Sources
Building a Long List
From Long List to Short List—Screening Targets for Strategic Fit
Planning Cross-Border Due Diligence
Defining Successful Options and Strategies for Mitigating Execution Risk in Cross-Border M&A Transactions
Political Climate and Legal Environment
Cultural Differences
Protective Employment and Labor Laws
Pre- and Post-Merger Integration
Chapter Checklist
Chapter 5 Cross-Border M&A: Region- and Country-Specific Trends and Deal Planning Tips
Introduction
Development of Regional/Country Business Environments
Some Useful Cross-Border Insights and Tips
Understanding Corporate versus Country Cultures When Doing Cross-Border M&A Deals
Regional and Country Practices That Influence Post-Merger Integration
Chapter Checklist
Part Two Cross-Border Culture and Leadership Alignment
Chapter 6 Leading during Cross-Border M&A
Why Leadership Is So Critical during M&A
Leadership Responsibilities of Acquiring Companies
Leadership Responsibilities of Target Companies
Undermining the Integration Planning Effort
Leadership Responsibilities of the Integration Management Office
“Information Gathering” versus “Information Sharing”
Symptoms of A Leadership Void and How to Address Them
Leadership Leading Practices
Chapter Checklist
Chapter 7 The Role of Culture in Cross-Border M&A
Understanding Cultural Management
Cultural Awareness
The Four Stages of Skillfulness
Definition of “Culture”
Global, Local, and Corporate Culture
Strategy and Culture
Linking the Deal with Cultural Factors: “Know Thyself”
Adjusting the Strategy to Optimally Leverage Differences in Values and Cultural Elements
Language
Digitization
Implementation
Phase 1: Before Any Deal Is on the Table
Phase 2: When a Deal Is Being Considered
Phase 3: Between Signing and Closing
Phase 4: After Closing
Chapter Checklist
Bibliography
Chapter 8 Managing National Reactions and Sovereignty Issues
The Ambivalent Relation between Cross-Border M&A and National Interest
Acquiring Abroad—Outbound Foreign Direct Investments
Inbound Foreign Direct Investments
Economic Globalization and National Interest
Inward Cross-Border Deals: Key Restrictions
The Nature of the Acquirer
The Nature of the Target
The Type of Transaction
The Definition of National Security
The Definition of Critical Industries
Other Restrictions
International Differences and Similarities
How to Deal with Sensitive Cross-Border Transactions
Deal Strategy
Stakeholder Management
Due Diligence Process
Deal Structure
Anti-Trust Compliance
National Security Review and Other Compliance
Governance and Legal Design
Integration Strategy Design
Employees
Communication
Conclusion
Chapter Checklist
Notes
Part Three Cross-Border Integration, Planning, and Execution
Chapter 9 Managing Pre–PMI Due Diligence
Introduction
Traditional Due Diligence
Legal Due Diligence
Financial Due Diligence
Tax Due Diligence
Commercial Due Diligence
Integrated Due Diligence—360-Degree Due Diligence
Different Types of Functional Areas Conducted in Integrated Due Diligence
Conducting the Due Diligence Process
Steps of Due Diligence
Methods of Due Diligence
Managing the Due Diligence Process
Common Mistakes in Due Diligence
Chapter Checklist
Notes
Chapter 10 Ramping Up an Integration Management Office and Day One in Cross-Border Deals
The Impact of an Integration Management Office on Cross-Border Integration
Purpose of an Integration Management Office
Understanding the Integration Management Office
What Is an Integration Management Office, and How Is It Different from a Project Management Office?
Functions of an Integration Management Office
Establishing and Executing the Integration Management Office
Relate Phase (Pre-Close)
Day One: Starting the Integrate and Analyze Phases
Integrate Phase on Day One
Analyze Phase on Day One
Chapter Checklist
Notes
Chapter 11 Integration Decision Making and Process Strategy in Cross-Border Deals
Preparation and Localization of Decision Making
Acquirer’s Decision-Making Process
Target’s Decision-Making Process
Decision Process Disconnects and Misconceptions
Decision Process Formality
Leadership Style
Primary Decision-Making Tools, Approaches, and Leading Practices
Grid Analysis for Complex Decision Making
Pareto Analysis, 80/20 Rule, the Ishikawa Diagram, and the Five Whys
Timing in Decision Making
Political Aspects of Decision Making in a Global Setting
Closed-Loop Decision Making
Synergy Mapping
Leading Practices for Global Integration Process Change
Leverage Existing Leadership Styles
Identify Change That Is Strategic versus Tactical or Busywork
Identify Active Champions, First Actors, Owners, and Internal Customers
Ensure Communication and Collaboration with the Use of a RACI Diagram
Assess and Align Incentives
Kaizen-Based Leading Practices
Core Principles
Holistic Business View
Continuous Improvement, PDCA, and Metrics
Standardization
Catching the Wave of Change
When to Use Technology Tools to Support Global Decisions and Process
When to Formally Stop a Process
Chapter Checklist
Chapter 12 Post-Merger Integration Process, Methodologies, and Tools
The M&A Life Cycle
Integration Planning and Execution in the M&A Life Cycle
Strategic Selection
Building Your Strategic M&A Vision Using Lanchester and Other Strategies
Identifying Strategic Sources for M&A
Target Screening Process
Linking Screening Results to Strategy
Establishing Long-Term Relationships with Potential Targets
Selecting the Deal Team
What Are Potential Issues and Barriers?
Linking M&A Vision to Screening Results
Integration Due Diligence
Synergy Analysis
Cultural Review
Business Model, Process, and Organizational Differences
The Leadership Team
Pre-Signing
Establish the Foundation for Post-Signing Communication
Establish the Foundation for Post-Signing Integration
Post-Signing
Defining Permitted Integration Activities Post-Signing during an Anti-Trust Investigation
Holding the Executive Alignment Meeting
Setting Up the Integration Management Office
Revisiting Synergies and Managing the Synergy Working Session
Stakeholder Analysis–Based Communication
Cultural Alignment
Planning Day One and Beyond
Importance of Establishing an Integration Performance-Driven Incentive Plan
Importance of Closing Activities
Post-Closing
Executing the Integration Team Launch
Importance of Successfully Managing the First 100 Days
Transition from Project Phase to Operational Responsibility
Post-M&A Integration Board Reviews
Importance of Corporate Success Celebrations
Chapter Checklist
Chapter 13 Managing Post-Merger Integration Globally
Introduction
Managing Cross-Border Post-Merger Integration Projects
The Integration Setting Components
The Acquisition Integration FrameworkTM (AIF)
Due Diligence
Relate
Integration Approach
Foundations of the Integration Process: Governance
Post-Merger Integration Plans, Mechanisms, Monitoring Tools
Analyze
Integrate
Chapter Checklist
Note
Chapter 14 Country-Specific Trends and Tips for Integration Planning
Opening
A Cultural Overview of the Most Active M&A Regions
Anglo-Saxon Regions
Communication
Evaluation
Persuasion
Leadership
Decisions
Trust
Disagreement
Time
Asian Countries
Communication
Clarify, Clarify, Clarify
Evaluation
Persuasion
Leadership
Decisions
Trust
Disagreement
Time
European Countries and Regions
Communication
Evaluation
Persuasion
Leadership
Trust
Disagreement
Time
Summary
Chapter Checklist
Bibliography
Chapter 15 M&A and Post-Merger Integration Considerations for China and Japan
Part 1: China
Overview of M&A Trends in China
Structural Shifting in China’s Economy
State-Owned Enterprise Reforms to Accelerate
Over-Capacity in Many Industries and Others Going through Consolidation
Issues and Approaches for Inbound M&A in China
Issue No. 1: Understand the Difference in Behavior, Culture, and Environment
Issue No. 2: What Is the Right Profile for the Integration Management Team?
Issue No. 3: What Is the Appropriate Governance and the Level of Control?
Issue No. 4: M&A Strategy Execution and Localization
Issues and Approaches for Outbound M&A from China
The Challenges
People Management
Management Issues
Local Experts Needed
Chapter Checklist for Part 1: China
Part 2: Japan
Overview of M&A and Post-Merger Integration in Japan
Matured Economy
Growth Strategy
Issues and Approaches for Outbound M&A and Post-Merger Integration from Japan
Issue No. 1: English Conversation Capability
Issue No. 2: High-Context Culture
Issue No. 3: Slow Decision Making
Issue No. 4: Bottom-Up Problem Solving
Issue No. 5: Inclination to Avoid Changes
Crystallize Goals and Strategies
Document Operational Process
Define Key Performance Indicators
Use Standardized Process for Post-Merger Integration
Communicate More
Issues and Approaches for Inbound M&A and Post-Merger Integration in Japan
Issue No. 1: Necessity to Install Reporting Systems Quickly
Issue No. 2: Lack of Clear Definition of Expected Result
Issue No. 3: Loss of Respect for Employees’ Dignity
Issues No. 4: Too Much Dependency on Fluent English-Speaking Members
Issue No. 5: Malfunction of Integration Management Office
Chapter Checklist for Part 2: Japan
Chapter 16 Cross-Border Synergy Program Management
Introduction
Defining and Validating Synergies
Negative Synergies
Complementary versus Overlapping Synergies
Structuring Synergy Programs
Critical Actions to Capture Synergies
Dependencies and Interdependencies in the Realization of Synergies
Is a Stringent Synergy Structure Needed?
Post-Closing Due Diligence
Tracking Synergies
Chapter Checklist
Part Four Unique Cross-Border M&A Transaction Scenarios
Chapter 17 Managing Carve-Outs and Transition Service Agreements
Introduction to Divestitures and Carve-Outs
The Context of Divestiture Impacts Carve-Out Processes
Divestiture Program Overview
Planning a Carve-Out and Transition
Transition Services
Reverse TSA and Long-Term Transition Service Agreement
Program Structure
Carve-Out Phase—People
Carve-Out Phase—Processes
Carve-Out Phase—Technology
Managing the Transition Service Agreement
Exiting the Transition Service Agreement
Transformation
Chapter Checklist
Chapter 18 Joint Ventures
The Joint Venture Life Cycle
Process Steps
Designing the Joint Venture Strategy
Joint Venture Types
Joint Venture Characteristics
Deal Structure
Introduction to Structuring Joint Venture Agreements
Definition of the Business
Completion Actions
Directors and Management
Funding and Financing the Joint Venture
Restrictions and Rights of Shareholders
Business Planning and Accounting
Termination
Confidentiality
Other Key Joint Venture Clauses
Chapter Checklist
Index
EULA