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?’

This was an article based on the Surviving M&A book, and summarising the key points for employees who are faced with a takeover of their company.  Yet again, it is in response to the proposed firings taking place at Cadbury following the announcement that it had agreed to the acquisition by Kraft.  This particular article does discuss how it might even be possible to further your career in light of such an acquistion.

As the Cadbury union leaders said, this appeared to have been a deliberate attempt by Kraft to mislead the employees of that plant (and indeed the whole company) in order to gain further support for it’s hostile bid.  It also sends, in the words of the union, ‘the worst possible message’ to the other Cadbury employees in the UK and Ireland.  Even the British Business Secretary, Lord Mandelson, had to say “This will confirm the fears of those who felt the takeover would result in job losses.”  He went on to say that “It is for the company [Kraft] now to prove the worth of their other statements about investing in the UK.”

There’s a clear message here for Cadbury employees and certainly for the employees of any  company acquired by Kraft in the future.  But how about employees of other companies that are acquired?

I do think that it is very likely in any M&A deal that there will be changes to the post-acquisition plans once the deal is signed and even moreso after the deal is closed.  This is more likely when the deal has been hostile (as was the case in with Kraft and Cadbury), as the acquirer will not have been able to spend time with the target’s current management discussing the company and it’s existing plans.  Much will remain unknown until after the deal actually closes and the two companies try to start operating as one.

It is therefore why I have noted in my book Surviving M&A that any employee should question any statement made by management during this period.  This is not to say that management will be trying to deliberately mislead employees;  more likely is that management JUST DIDN’T KNOW.  But all the more reason to be prepared fully for the possibility of redundancy and to do whatever you can to better your chances of being retained if your entire division isn’t axed after the deal.

I especially appreciated the extra comments under that article that you can see if you scroll down, that do, I must admit, follow some of the further advice provided in the Surviving M&A book.  Nice to see as well that another BNET correspondent has said that the deal probably won’t be successful in the long term anyway (as up to 80% of all HOSTILE deals fail, he notes).  This is a clear message to Cadbury employees to look for ways to exit the firm before the turmoil sets in.  It’s actually a clear message to any employee in any company being acquired.

But the employees of Cadbury should certainly be worried.  On average, 10% of the workforce in an acquisition will be fired.  Sometimes it’s as high as one-third!  This, despite the assurances of Kraft that they will even keep open the planned plant closures in England that had previously been announced by Cadbury.

It was nice to see that Stefan Stern of the Financial Times included in his blog the ‘top ten tips’ for those Cadbury managers.  You can see his blog here.  The advice actually applies to ALL Cadbury employees…

As noted in one of the comments to that blog and also as I’ve written in my book, first employees should determine whether they actually want to stay, because now may be an excellent time to leave.

You can see the video here:  Cass Talks Episode 8 – Scott Moeller on how to survive if your company is going through an M&A deal

These mega deals certainly do get a lot more press, but actually your chances of being made redundant in a very large deal may just be less (percentage-wise, at least) in the short term than with smaller deals.  Most of the smaller deals will see immediate activity when the deal’s closed.  People will very quickly know whether they will be fired or retained (and some are retained for a while but will be told that they will have to leave, usually after the integration is complete).

In the larger deals, these redundancy decisions usually take longer to make and then also to implement.  At least this gives you some time to prepare — along the lines of what is discussed in the Surviving M&A book.

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!

You do have some legal rights.  There’s differences between being fired (also called ‘dismissal’) and your position being made redundant.  In most mergers or acquisitions, what’s happening is that many (sometimes up to one-third of all) jobs will disappear when the two companies combine.  The company no longer needs everyone.  Two payroll departments become one,  two salesforces become one … and the same throughout the organisation where there is any overlap between the two formerly-separate companies.

The book Surviving M&A contains an entire chapter on this topic, covering issues such as your rights to protection against unfair selection, the requirement to consult with you (or your representatives, if you are a member of a union) and to provide you with some sort of redundancy pay, which is often specified at a minimum level in law.  The book also covers the role of the Human Resources department in this process and how managers usually determine who to keep and who to fire.

There’s also a nice on-line article that has appeared on-line recently with some of the telephone numbers to call and some of the legal jargon explained:  ‘Redundancy Rights:  Your rights when being made redundant‘.  This is a UK-specific site, so may be of limited use to those outside the United Kingdom.  There’s another one on UK redundancy rules at PrudentMinds.  For those in the US, Fortune and CNN Money have covered this well in ‘Life after Redundancy‘.