Prelims

Half Title Page

MAKING MERGERS AND ACQUISITIONS WORK

From Strategy and Target Selection to Post Merger Integration

Title Page

MAKING MERGERS AND ACQUISITIONS WORK

From Strategy and Target Selection to Post Merger Integration

BY

MARKUS VENZIN

Bocconi University, Milan, Italy

MATTEO VIZZACCARO

SDA Bocconi School of Management, Milan, Italy

FABRIZIO RUTSCHMANN

Prysmian Group, Milan, Italy

United Kingdom – North America – Japan – India – Malaysia – China

Copyright Page

Emerald Publishing Limited

Howard House, Wagon Lane, Bingley BD16 1WA, UK

First edition 2018

Copyright © 2018 Emerald Publishing Limited

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British Library Cataloguing in Publication Data

A catalogue record for this book is available from the British Library

ISBN: 978-1-78743-350-2 (Print)

ISBN: 978-1-78743-349-6 (Online)

ISBN: 978-1-78743-454-7 (Epub)

A Definitive Guide to the Creation of Your Own M&A Playbook

In many industries, M&A is a central tool to be used in strategic objectives like market entry, technological leadership, or efficiency in production and distribution. But the success rate of most merger and acquisition deals is low. Flawed strategizing, unrealistic synergies, poor target selection, cultural clash, and, most of all, weak post-merger integration processes pose huge challenges which can lead to costly failures. Still, the lack of organic growth opportunities for many firms — especially in mature markets — leave them little choice. They must acquire or risk stagnation.

This book addresses the salient question of how to make M&As work. We offer the unique possibility to embark with us on the journey to reflect upon the past M&A activities of Prysmian — the global leader in energy and telecom cables — by sharing its real-world experience and carving out a manual for success in a mature industry that requires high levels of integration between operating companies. Co-author Fabrizio Rutschmann, Chief Human Resources Officer (CHRO) will, together with his colleagues, offer you a deep, insider perspective — another rarity in publications on this topic. (Rutschmann is the other half of the narrative voice, although he will be referring to himself in third person throughout this book for clarity’s sake.)

Throughout, as we refer to Prysmian, you will notice a slight shift in tone, particularly in the latter half of the book, where we discuss in detail the post-merger integration process, an area that has been much overlooked by the previous literature, and where Prysmian’s example shines. This less formal approach is reflective of our intimacy with the case, and our desire to bring you into the company at a more granular and personal level.

“Certainly, one of our greatest strengths is our openness,” observes Andrea Pirondini, Chief of Operations for Prysmian Group. “In fact, we are so candid about many of the most contentious issues in business that, in any other company, we would be thrown out of the boardroom!”

Prysmian’s management team has afforded us a unique opportunity, and one that we intend to exploit fully, particularly in the later chapters where Prysmian executives divulge their greatest post-integration challenges.

That said, the M&A story will not only be told from the Prysmian perspective. The invaluable insights from Prysmian will complemented by numerous case illustrations from other companies operating in a wide range of industries.

This revolutionary playbook is organized into five main sections, corresponding to the complete M&A process:

1. strategy;

2. target selection;

3. due diligence;

4. negotiation and deal closing; and,

5. post-merger integration.

We base our intensive study on over 50 M&A deals and the relevant academic literature. In order to save the readers’ time, we summarize the key messages of the book as propositions: if you agree with what we propose and already run your M&A processes as summarized by the statement, you may either decide not to read these specific sections or skim for insights that expand upon your knowledge base.

However, if you disagree with our recommendation, and see potential in getting a different viewpoint or a way to implement change in your company, you may invest time to carefully study what we have to say and adapt to your own unique circumstances. This is how you create your own M&A playbook. Think of this as your customized guide, complete with a series of codified steps that will increase the likelihood that your next acquisition creates long-term shareholder value. It’s an investment of time that will pay off greatly in your company’s future.