Stories about surviving M&A deals
This is a question that I get asked repeatedly and often. I guess this is what should happen if I’ve written a book on how to survive when your company’s been acquired (Surviving M&A: Make the most of your company being acquired).
On this blog, I’ve also been conducting a poll. Granted, it is unscientific because only those who want to answer the poll have done so, some may have answered more than once (although unless they’ve been in more than one acquired company, I don’t know why they would have done this, and the poll itself should block repeated votes from the same computer) and there’s no way to determine who has answered it. Nevertheless, with several hundred votes, it’s time to look at the results. [Note, at any time you can go to the homepage of this blog and click on the 'view results' line on the poll.]
At this time, it looks like the following:
- 37%: Kept old job
- 34%: Fired / made redundant
- 21%: Promoted
- 7%: Demoted
What does this tell us? Well, it’s not as bad as you might have thought if your company is targeted for acquisition by another company.
Of course, a solid one-third were fired or made redundant, which is higher than our research would indicate (which should be closer to 10-12%!), but given the fact that people visiting this blog have probably done so because they’ve had problems keeping their jobs, perhaps not surprising. But note as well that more than 20% did better out of the acquisition than if it hadn’t occurred. Thus, there’s room for hope…
…And I’d like to think that the ones who were promoted were the ones who had read my book when they first heard their company was being acquired. One hopes.
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Are you asking yourself the question ‘Is my company being acquired?’ Should you be?
In earlier blogs here and also in the Surviving Mergers book, I have said that it is critical to take a number of steps BEFORE the acquisition takes place in order to better your chances of being retained by the new owners. Assuming, of course, you don’t want to leave the company and have nothing to do with those new owners!
But how do you tell if your company’s being acquired? It would be very helpful to know this in advance of the official announcements so that you can be fully prepared.
First, take all rumours seriously. Just as some people say ‘there’s always some truth to any joke’, there may be some basis to a rumour and the gossip about your company that you hear. If you do start to hear such rumours — even if they are flatly and emphatically denied by management (and often they HAVE to do this for legal reasons) — you should then begin preparations.
If there aren’t any rumours, you can still pick up the ‘weak signals’ that something is happening. One of my MBA students in my Mergers & Acquisitions class told us that he noticed lots of people in the lift each morning in fancy suits going to the executive floor and that all client meetings on that floor had been cancelled (and those inside the firm were told to find meeting rooms outside the headquarters). He said two weeks later it was announced that his company (the Royal Bank of Scotland) was launching a hostile bid for the Dutch bank, ABN AMRO.
So look for the key signals that a deal is being discussed:
- Unavailability of senior executives at functions where you would expect them to appear
- Requests for information about your work that are outside the ordinary (the bidding company may be doing due diligence on your company)
- Frequent or even consistent visits by ‘suits’ — probably investment bankers, lawyers and accountants who would be advising your senior management on the deal
- Fewer corporate announcements from the PR and Investor Relations departments (as your company may be concerned about saying anything that would affect the planned deal)
- Disappearance of key staff in accounting, HR, operations, etc. These people may have been pulled out to work on the deal, as it isn’t just the senior managers who are working on it early on, as they need support to do the detail.
- Delays in product launches, due to management distraction or a desire to delay the launch until AFTER the deal’s been announced. Similarly, there could even be an acceleration of product launches if management thinks this might increase the price that they can get for the company.
There are certainly other signs. You know your company best, so you can best assess whether there’s something different — and unexplained — going on. If you do have other suggestions, please leave them below.
Of course, sometimes — maybe usually — the announcement of an acquisition will come as a complete surprise to everyone in the target company. This is likely to be true especially if the deal is hostile and your management will be fighting the deal. If you only hear about it along with everyone else, then start to take preparatory steps immediately. See our posting ‘What to do first if your company’s being acquired?’Read Full Post | Make a Comment ( 2 so far )
Much of this website and blog is about how to reduce the chances of being made redundant if your company is acquired or merges. But as I’ve also noted both here in earlier blogs and in my book on surviving M&A, most mergers result in 10-15% of the employees and managers being fired, so there will be some people who ARE going to leave the firm. Some will see the handwriting on the wall and leave voluntarily, but most will wait to collect their redundancy and termination packages.
So, what to do if you are one of the unlucky few to leave? (Although note the advice in the book that you might just be one of the LUCKY ones if you leave, as most mergers and acquisitions ultimately fail and the deal may be the impetus you needed anyway to move on to something better.)
There actually IS life after redundancy or being fired. There’s a useful, short article written by an executive coach in Yorkshire saying exactly this (‘Life after redundancy‘) in which she says: ”The good news is that people can move on after redundancy. Even better news is that only one out of all the people interviewed said that he’d have his old job back, given the chance.’ Read the article, but note that she does have several excellent suggestions, including
- Don’t rush into another job too soon. Use your time to think about what you really want and don’t want.
- If you want to do something different, go for it. Don’t be put off by re-training. It’s an experience in itself.
All very sound advice!Read Full Post | Make a Comment ( 1 so far )
A manager in China was killed by rioting employees when he gave them a speech telling them that they would be made redundant within three days following the acquisition of their company. The riots also left over 100 people injured. The full story is here from Management Today.
As that article states, ‘And while we can’t in all conscience recommend such a drastic course of action, it does seem to have worked – for the time being at least. The deal has been scrapped and the jobs are reportedly safe.’ This weblog is intended to provide people with tips and ideas about how to survive if your company is undergoing a merger or acquisition, and it must be said that this is not a suggestion recommended here or in the Surviving M&A book. ‘Don’t try this yourself at home’, as they say on TV.
Prior to this, as also noted in that article, the French custom of kidnapping managers and holding them for ransom if jobs will be lost is no longer the example of extreme reactions to the announcement of M&A deals.
Anyone else with examples of severe actions taken when a deal is announced, although I certainly hope none will include bodily harm!Read Full Post | Make a Comment ( None so far )
In the Financial Times of 30 June 2009, columnist Stefan Stern wrote an article about how to survive a merger, having in hand an advance copy of my new book: Surving M&A: Making the Most of Your Company Being Acquired.
Gratifying to see Stefan Stern’s suggestion that ”…we should be grateful that Scott Moeller…has picked this moment to publish a useful new book.’
He goes on to agree that everyone in two merging companies needs to be thinking about their future as possibly uncertain, that talent doesn’t necessarily mean you’re a personal winner and nor does seniority (in fact, in the latter case, it works against you), and that there are ‘strange, disingenuous things’ said during the deal.
As Stefan Stern said in the article: ‘M&A can be fraught and filled with potential hazards’. Exactly! Which is why a proper defensive — or even offensive — plan is needed by each and every employee.
Anyone with any examples of the above? Please comment below!Read Full Post | Make a Comment ( None so far )