Articles on surviving an acquisition

How to tell if your company is being acquired?

Posted on 3 March 2010. Filed under: Articles on surviving an acquisition, Stories about surviving M&A deals, Tips & Suggestions |

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?’

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More advice on avoiding redundancy…

Posted on 25 February 2010. Filed under: Articles on surviving an acquisition |

On Wednesday, 24 February 2010, the Times of London published an opinion piece entitled: ‘How to ward off redundancy in chaos of M&A’.

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.

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‘Management Today’ Article on Surviving an Acquisition

Posted on 2 February 2010. Filed under: Articles on surviving an acquisition, Tips & Suggestions |

In light of the takeover of Cadbury by Kraft, I was asked to write an article in Management Today entitled ‘MT Expert’s Ten Top Tips: Surviving M&A’.  Please do see the article, which is based on some of the findings from the book:  Surviving M&A: Make the most of your company being acquired.

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(More than) Ten Ways to Survive a Merger

Posted on 24 January 2010. Filed under: Articles on surviving an acquisition, Tips & Suggestions |

The decision by Cadbury to accept Kraft’s offer has certainly stimulated interest in what’s happening to the employees there.  BNET (the on-line business service from CBS) has published an article two days ago that has picked up on the advice offered by the Surviving M&A book and as also noted by the Financial Times blog a few days ago.

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.

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Surviving the Kraft acquisition of Cadbury

Posted on 21 January 2010. Filed under: Articles on surviving an acquisition, Tips & Suggestions |

Very nice to see that the Financial Times has yesterday reiterated the advice from this blog and Surviving M&A book about how to survive an acquisition.  The news is now that Cadbury WILL now be bought by Kraft, as the revised price of the offer has now reached a level where the board of Cadbury can no longer argue that the shareholders benefit.

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.

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Book Review: ‘Surviving Mergers’ from The Times, 2 September 2009

Posted on 3 September 2009. Filed under: About the book / weblog, Articles on surviving an acquisition |

There was an excellent summary and review by Emily Ford of the Surviving Mergers:  Make the most of your company being acquired book in the 2 September 2009 issue of The Times and also available on-line here.  She entitled her review ‘In a merger, survival can depend on you’, which is certainly true, yet often not understood by most employees.  Clearly, as the M&A markets are showing strong signs of revival, this is even more important even than when the book was published less than two months ago.

Emily wrote in the article that ‘The spectre of a merger is enough to send a chill down the spines of most employees — with good reason. Mergers always carry a risk of redundancies: on average, 10 to 15 per cent of employees across both organisations lose their jobs in a merger, sometimes as many as a third. Even those who keep their jobs are likely to be fearful of the change to the status quo.’

She goes on to write:

‘In a book just published, Surviving M&A: Make the Most of Your Company Being Acquired by Scott Moeller, director of the M&A Research Centre at Cass Business School in London, explains how to improve your chances of keeping your job, based on 350 interviews with employees who have been through M&A deals. “The first question you need to ask yourself is: ‘Do you want to stay?’ ” Professor Moeller said. “A merger might be the best time to leave.”’

The article includes 10 of the key pieces of advice to reduce your ‘risk of being made redundant in a merger’ if you do decide that you want to fight for your job.  It also notes that ‘Workers in Britain, America and the Netherlands are more at risk of being made redundant than those in Germany, France and Japan, thanks to employment legislation differences.’    But, as she adds at the end,

‘Despite your best intentions, things might not work out. If you plan to stay at your company, go to a few interviews anyway to test the market and work out your value. “Mergers are unpredictable. Remaining flexible will give you more options,” Professor Moeller said.’

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‘When it comes to mergers, just look after No 1’ (Times)

Posted on 19 August 2009. Filed under: About the book / weblog, Articles on surviving an acquisition |

An article in the Times this morning (19 August 2009) noted from the Surviving Mergers book the importance of making sure that you don’t depend too much on your boss to take care of you when your company is acquired or even if your firm is the larger one taking over another company. Dominic Walsh wrote ‘A new book by Scott Moeller, a former banker at Morgan Stanley and Deutsche Bank, advises employees on the best way to hang on to their jobs in the event of a merger or takeover by a rival,’ and then continued with:

In assessing the economics of a deal, the shareholders and other analysts will look to see that the gains from the merger will exceed the costs. But perhaps the most telling piece of advice in his book — Surviving M&A: Make the Most of Your Company Being Acquired — is: “Don’t rely on your boss — in a merger everyone looks out for themselves.”

Given that the book is based on 350 interviews with people who have been through M&A deals, we can assume that a number felt that they had been stabbed in the back by their bosses.

But what about bosses nursing similar wounds? “It is fair to say we interviewed bosses who felt that after the deal, it was all about looking out for No 1,” Moeller admits.

This is certainly an important area that was highlighted frequently in our interviews. It’s not that your boss doesn’t have your best interests in mind or that (s)he doesn’t care, but often middle managers and even very senior ones do not really know what is going to happen, they may have been told they are secure themselves but then the situation changes unexpectedly (mergers ARE very uncertain even after closing), they are themselves going through the emotional roller-coaster caused by the deal, and, of course, will be most concerned about whether they have a job first.

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‘How to survive the maelstrom of a company merger’ (Financial Times)

Posted on 30 June 2009. Filed under: About the book / weblog, Articles on surviving an acquisition, Stories about surviving M&A deals, Tips & Suggestions |

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 bookSurving 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!

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