Human Resources management in M&A - A media study
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This is a media review of HR Management practices in Mergers and Acquisitions and how some of the well known M&As have transpired in the past.
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Human Resources management in M&A - A media study
- 2. AGENDA • CASE STUDIES AND MEDIA REVIEW • ABInBev • Total S.A. • INSIGHTS AND TAKE AWAYS • Factors of Success and HR aspects in M&As • Post M&A integration - Pros and Cons
- 3. CASE STUDIES & MEDIA REVIEW
- 4. 2008 Modern European Cost- Cutting Traditional American Extravagant Aim: To gain leadership in the Beer Market
- 5. The Outcome USD 52 bIllion deal Market cap: USD 63 billion (2011) 1400 jobs slashed in the US InBev culture imposed Cost-cutting atmosphere Incentives based pay Executives replaced Another cost-cutting plan in 2010 “I thought the message from InBev was, if you don’t think we’re serious, look at what we’re willing to destroy,” Cheryl Stelter, 21-year A-B employee
- 6. 1999 North Africa Middle East Western Africa Inshore Offshore Gas Elf Aquitaine Aim: To gain leadership position in oil industry
- 7. TOTAL S.A. USD 46 billon deal Market cap: USD 101 billion (2011) 93,000 employees (2011) 340 job cuts in senior management 1313 job cuts in workforce All job cuts on incentive plans – no dry layoffs Pension schemes unified over 3 years under Total System
- 8. INSIGHTS
- 9. KEY THEMES IN THE MEDIA Layoffs Other cutbacks Culture Change Impact on the community Financial implications
- 10. HR ASPECTS & SUCCESS FACTORS IN M&A Early preparation (strategy, costs, regulations) Coordinated commitment of all actors Lines and corporate functions including HR Follow-up on integration plan Degree of integration Corporate culture Compensations (in integrated corporations) Job cuts (when functions are redundant)
- 11. LONG TERM EFFECTS Uncertainty over Executive Turnover Political exposure: Employment & Strategic assets
- 12. KEY TAKE AWAYS • M&A: strategic and financial • HR preparation required to prevent failure • HR execution: key to long term success • Local regulations: additional obstacles
- 13. QUESTIONS?
Notas do Editor
- InBev2nd largest European brewer, with Stella Artois, Beck’s and Skol brandsBased in Belgium, with ties to BrazilInformal, modern office cultureValues efficiency and cost cuttingCompetitive work environmentAnheuser-BuschLargest brewer in US with Budweiser brandProud American companyTraditional, professional office environmentGenerous pay and benefitsSense of “family”High spending on reputation-building
- InBev immediately slashed more than 1,400 US jobs.Quickly imposed InBev cultureCut pay and benefitsReplaced most executivesSold $7 billion in assetsIn 2010, announced “Kashi” restucturing planProsClear and direct, open communicationActed quickly to make integration happenSucceeded in cutting costs and improving efficiencyConsLikely overlooked some A-B business practices that were worth keepingMay have lost valuable A-B employeesFear likely distracted employees from jobs during the transition“I recognize the uncertainty some employees have about their standing with the company. But we wanted to be as upfront as possible,” Dave Peacock, new President of Anhueser Busch, February, 2010.
- Reference to articles pointing out interesting consequencesTurnover: Lead to long term abnormally high turnover of executives in merged entities for period over 10 years in average (Mergers and Acquisitions Lead to Long-Term Management Turmoil Newswise, Retrieved on July 14, 2008.)Big M&A: In countries where social protection is developed, the costs of maintaining HR peace is high (inability to reduce the work force out of recession periods) - this parameter is taken in account during the design of the M&A operationExamples: Arcelor Mittal, EADS