Tips & Suggestions

Surviving Mega-Mergers, Advice from Advisors

Posted on 24 November 2009. Filed under: Tips & Suggestions |

It just came to my attention that a blog on BNet UK has discussed how to survive a mega merger — the kind that everyone’s talking about after Kraft made its offer for Cadbury and now Hershey and Nestle are possibly in the fray as well.  Titled ‘How to Survive a Mega Merger‘, it focusses principally on advice for the senior management and advisors, but has some tips for all employees as well.

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.

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What happens if you ARE fired or made redundant after a merger?

Posted on 6 November 2009. Filed under: Stories about surviving M&A deals, Tips & Suggestions |

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!

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Your rights if you’re fired or made redundant

Posted on 19 October 2009. Filed under: Tips & Suggestions |

It happens.  You wake up one morning to find out your company’s being acquired.  Your first thought:  will I be able to keep my job.

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‘.

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Hostile Deals: Caveat Emptor

Posted on 9 October 2009. Filed under: Tips & Suggestions |

In a related blog, I’ve commented on hostile deals.  Why?  There’s been a lot of press on this topic because of last month’s $19 billion unsolicited (hostile) offer for Cadbury by Kraft.  Certainly, as I note in that blog, the deal has had so much attention not just because it’s hostile, but it’s also all about chocolate!

The facts about hostile and unsolicited deal:  first, there aren’t many of them (in fact, only about 1% of all announced deals are either hostile or unsolicited).  Secondly, only 40% of those ever do get completed.  As there’s fewer than 100 hostile or unsolicited bids in an average year recently, that means only 40 complete (although admittedly a very small number of those targets that do escape nevertheless end up being purchased by somoene else eventually).  Not huge numbers.  But you certainly don’t want to be in one of those companies if the deal does complete, or even in one of the 100 that receives a bid.

When a hostile deal is successful, it’s bad news for the employees and management of the company that’s been taken over.  A greater percentage of employees in a hostile target are made redundant than when a deal is friendly.  There’s less chance to negotiate before the deal completes to maintain your position in the company — or even to negotiate ANY position.  And very often the hostile bidder wants the company only for its assets, which is why they were willing to initiate a hostile deal in the first place because they didn’t care whether they antagonised the employees or not.

Another reason to focus immediately on your survival when you hear that your company may be the target of a hostile bidder!

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What to do first if your company’s being acquired?

Posted on 19 September 2009. Filed under: Tips & Suggestions |

You wake up one morning and you read that your company is being acquired.  Aside from the shock of hearing this, your first thought (other than ‘OMG!’ and ‘Is this a dream or am I really awake already?) usually is:  ‘What should I do if my company’s being acquired?’

That IS the right question.  What DO you do when you hear you’re company’s being acquired.  From the start, never ignore it.  Ultimately, what you heard or read may not be true, but don’t count on your luck at this point.  The announcement may be true but then never happen because ultimately the CEOs or the Board couldn’t agree on the deal with the purchaser.  Or the purchaser walks away.  Or maybe the government came in to stop it (something more common in some countries such as France, but don’t count on a government rescue if you’re in the US or UK).  It therefore may never happen, but then again it might, and you haven’t wasted too much time or energy if you assume that it will and you turn out to be wrong.

There is a whole book written about what you should do when you hear the news that you’re company is being (or might be) acquired.  But assuming you didn’t expect it and therefore have to take action NOW before you can get your hands on a copy of that book, you might want to consider the following:

First, don’t assume that anyone in the company will take care of you.  Even your boss … and maybe even especially your boss.  Unless your manager is part of the inside circle that designed the acquisition, he or she may actually know less than you do about what will happen.  That may be counter-intuitive, but too often true.  Similarly, the higher up in the organisation you are, the more likely you will be made redundant, so your boss is actually MORE likely than you to get fired.

Second, prepare for the worst.  Do not put all your eggs in one basket (an internal opportunity).  So much changes during an M&A deal even after announcement that despite the fact that you might have been promised a position in the new organisation, the situation may change rapidly and the offer is withdrawn.  Have an exit plan.  Think about what you would do if you did lose your job, and then position yourself accordingly.  Just in case.  Consider it as your employment insurance policy, and invest some time in it.

Third, take proactive steps to protect your job.  The second half of the Surviving Mergers book has numerous suggestions about which actions others have found to be effective when their companies were acquired, but only you know best your own situation.  Offense is the best defense.

And when you’ve succeeded, please do come back here to this Surviving Mergers blog and let us know what worked for you so that others can use your ideas as well.  Or if your plan didn’t work, let us know as well so that others can avoid doing the same.  Thanks!

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This wave of M&A deals: Who will be made redundant now?

Posted on 17 September 2009. Filed under: Tips & Suggestions |

Strategic acquisitions are once again headline news with the announcement of a number of massive deals on both sides of the Atlantic (see the blog entry in a sister website:  Has the M&A market returned?  Green shoots turn into harvest time…’).

Wait a few weeks or months, and the headlines will talk more about the people who will be (or are already) being made redundant from those deals.  As naturally as dusk follows day and water flows downhill, the merger of two companies results in people being fired, plants and offices closed, product lines shut down or merged and one of the two CEOs (plus one of the two CFOs, HR heads, Senior VPs for IT, etc) taking ‘early retirement’ or departing ‘for personal reasons’ and later showing up at a lesser well-regarded competitor.

Is there anything you can do about this if you’re one of the people in a company where a merger has just been announced?  Yes, there definitely is.  And you should – because on average 10-15% of employees across both companies will be made redundant or leave because of the deal, and the figure can be as high as one-third.

The first thing you need to do is to decide whether you really want to stay — or should you take the (often very attractive) redundancy or severance package and find another job.  But assuming you want to stay…

There are many steps you can take to stay, as discussed in that book, ranging from ‘showing off’ your (hopefully) excellent work (and going against the natural tendency to ‘stay low’ at a time like this), increasing your internal networking and even volunteering for the planning and transition teams.

If the M&A market has truly started growing again and if we really are therefore at the start of a new strong M&A wave, then many people will be faced with the need to ‘survive’ in a way that they hadn’t anticipated.  Best to get started now with some planning, even if you feel your company isn’t at risk.  Do you think most of the employees at Cadbury anticipated the need to plan an acquisition survival strategy in 2009? Or did Mavel’s employees expect that they’ll need superhuman skills to retain their jobs in 2010?

[Note:  you can find a variation of this posting on my other blog, Intelligent Mergers]

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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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