Cross-border Mergers and Acquisitions

Cross Border Mergers and Acquisitions is a practical toolbox for corporate strategy and development professionals dealing with the many challenges involved in cross border M&A. With a detailed discussion of key market specifics and broadly-applicable critical insight, this book demystifies the cross border M&A process and provides a host of practical tools that ease strategic implementation. A geographical overview explains the trends in major M&A markets including Australia, Brazil, China, Russia, the U.K., and the U.S., and industry-specific guidance covers Financial Services, Aerospace and Defense, Health Care, Tech, Manufacturing, and more. Leading experts relate lessons learned while managing actual PMI (post merger integration) processes, and the discussion of cultural impacts and specific situational needs provides deep insight into the type of leadership a flawless integration requires.

Corporate restructuring and internationalization efforts are increasingly relying on cross border mergers and acquisitions. Strategies, motives, and consequences are a complex navigational minefield, but this insightful guide provides solid, actionable guidance for leading a successful integration.

• Understand the region-specific details that make an impact
• Overcome common challenges and manage complex deals
• Gain practical insight and valuable tools for leading integration
• Learn the most current best practices for PMI® processes

Cross border M&A is complex, with myriad challenges and obstacles inherent to the situation. Successful integration and a smooth transition are critical, and there's little wiggle room—it's a situation where you have only one chance to get it right. Cross Border Mergers and Acquisitions is an essential guide to the process, with key tools for execution.

SCOTT C. WHITAKER has been involved in over two dozen mergers and acquisitions totaling nearly $100 billion in value. His industry experience includes health care, financial services, telecommunications, gaming, hospitality, chemicals, oil and gas, industrial manufacturing, retail, and consumer durables. Scott has worked internationally in Canada, China, Europe, and Africa on a variety of assignments, and specializes in establishing Integration Management Offices (IMOs) and helping companies develop integration playbooks. He is the author of Mergers and Acquisitions Integration Handbook.

Preface xi

About the Author xv

About the Contributors xvii

Part One Cross-Border Strategy and Deal Planning

Chapter 1 Cross-Border Deal Evolution and Rationale 3
Gilles Ourvoie

The Evolution of M&A and Cross-Border Deals 4

Strategic Motives 23

Factors Influencing Cross-Border Deals 28

Chapter Checklist 42

Chapter 2 Cross-Border M&A Strategy and Deal Planning Essentials 45
Michael Holm

M&A Strategy Overview 45

Components of Cross-Border M&A Strategy 50

Responsibilities and Accountability in the Organization 53

Target Company Criteria 56

Prepare and Plan for a Cross-Border Deal 59

Chapter Checklist 63

Chapter 3 Legal, Financial, Social, and Political Interdependencies with Cross-Border Integration 65
Andrew Scola

Introduction 65

Legal Impact 68

Financial Impact 78

Social Impact 81

Political Implications 82

Managing External Risks and Issues 84

Chapter Checklist 85

Chapter 4 Trends and Leading Practices in Global M&A 87
Thomas Kessler

Global Transaction Trends in the Post–Financial Crisis World 88

The M&A Life Cycle 89

Developing a Succinct Cross-Border Transaction Strategy 92

Matching M&A Strategy with Transaction Reality 98

Selecting the Right Candidate 102

Planning Cross-Border Due Diligence 105

Defining Successful Options and Strategies for Mitigating Execution Risk in Cross-Border M&A Transactions 107

Chapter Checklist 110

Chapter 5 Cross-Border M&A: Region- and Country-Specific Trends and Deal Planning Tips 111
Michael Holm

Introduction 111

Some Useful Cross-Border Insights and Tips 118

Understanding Corporate versus Country Cultures When Doing Cross-Border M&A Deals 120

Chapter Checklist 123

Part Two Cross-Border Culture and Leadership Alignment

Chapter 6 Leading during Cross-Border M&A 127
Scott Whitaker

Why Leadership is So Critical during M&A 128

Leadership Responsibilities of Acquiring Companies 129

Leadership Responsibilities of Target Companies 131

Leadership Responsibilities of the Integration Management Office 133

Symptoms of A Leadership Void and How to Address Them 134

Leadership Leading Practices 136

Chapter Checklist 137

Chapter 7 The Role of Culture in Cross-Border M&A 139
Christophe Van Gampelaere

Understanding Cultural Management 139

Cultural Awareness 141

Strategy and Culture 149

Implementation 156

Chapter Checklist 164

Chapter 8 Managing National Reactions and Sovereignty Issues 167
Gilles Ourvoie

The Ambivalent Relation between Cross-Border M&A and National Interest 168

Inward Cross-Border Deals: Key Restrictions 174

International Differences and Similarities 189

How to Deal with Sensitive Cross-Border Transactions 190

Conclusion 196

Chapter Checklist 198

Part Three Cross-Border Integration, Planning, and Execution

Chapter 9 Managing Pre–PMI Due Diligence 203
Eitan Grosbard

Introduction 204

Traditional Due Diligence 206

Integrated Due Diligence—360-Degree Due Diligence 219

Conducting the Due Diligence Process 224

Chapter Checklist 228

Chapter 10 Ramping Up an Integration Management Office and Day One in Cross-Border Deals 229
Stefan Hofmeyer

The Impact of an Integration Management Office on Cross-Border Integration 229

Understanding the Integration Management Office 232

Establishing and Executing the Integration Management Office 237

Day One: Starting the Integrate and Analyze Phases 247

Chapter Checklist 250

Chapter 11 Integration Decision Making and Process Strategy in Cross-Border Deals 251
Stefan Hofmeyer

Preparation and Localization of Decision Making 251

Primary Decision-Making Tools, Approaches, and Leading Practices 257

Leading Practices for Global Integration Process Change 263

Kaizen-Based Leading Practices 266

Catching the Wave of Change 268

Chapter Checklist 270

Chapter 12 Post-Merger Integration Process, Methodologies, and Tools 273
Thomas Kessler

The M&A Life Cycle 274

Strategic Selection 275

Integration Due Diligence 279

Pre-Signing 281

Post-Signing 283

Post-Closing 293

Chapter Checklist 298

Chapter 13 Managing Post-Merger Integration Globally 299
Eitan Grosbard

Introduction 300

Due Diligence 305

Relate 306

Analyze 316

Integrate 318

Chapter Checklist 319

Chapter 14 Country-Specific Trends and Tips for Integration Planning 321
Christophe Van Gampelaere

Opening 321

A Cultural Overview of the Most Active M&A Regions 323

Anglo-Saxon Regions 324

Asian Countries 328

European Countries and Regions 334

Summary 337

Chapter Checklist 338

Chapter 15 M&A and Post-Merger Integration Considerations for China and Japan 339
Robert Ping Yu, Makoto Ideno, and Masaki Yamamoto

Overview of M&A Trends in China 339

Issues and Approaches for Inbound M&A in China 343

Issues and Approaches for Outbound M&A from China 353

Chapter Checklist for Part 1: China 356

Overview of M&A and Post-Merger Integration in Japan 357

Issues and Approaches for Outbound M&A and Post-Merger Integration from Japan 358

Issues and Approaches for Inbound M&A and Post-Merger Integration in Japan 361

Chapter Checklist for Part 2: Japan 365

Chapter 16 Cross-Border Synergy Program Management 367
Michael Holm

Introduction 367

Defining and Validating Synergies 371

Structuring Synergy Programs 376

Critical Actions to Capture Synergies 378

Post-Closing Due Diligence 384

Chapter Checklist 388

Part Four Unique Cross-Border M&A Transaction Scenarios

Chapter 17 Managing Carve-Outs and Transition Service Agreements 391
Andrew Scola

Introduction to Divestitures and Carve-Outs 391

The Context of Divestiture Impacts Carve-Out Processes 392

Divestiture Program Overview 394

Planning a Carve-Out and Transition 395

Program Structure 398

Managing the Transition Service Agreement 407

Chapter Checklist 409

Chapter 18 Joint Ventures 411
Thomas Kessler

The Joint Venture Life Cycle 411

Chapter Checklist 423

Index 425

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