M&A

Navigating to M&A Success
A Guide to the What, When and How of Effective Deal Making

An Introduction to
Our M&A Services
The Significant Seven
Explore by Deal
Time Frame
Organizational
Finding What You Need
Readiness
Due Diligence
Integration Planning
Implementation
Explore by Deal Type

Domestic
Cross-Border and
Emerging Markets
Spin-Offs, Divestitures
and Joint Ventures
Partnering With
Towers Watson
Insurance M&A
Services
Global Reach
M&A Tools
2 Towers Watson Navigating to M&A Success: A Guide to the What, When and How of Effective Deal Making
While it’s impossible to predict the movement of the global economy over the next
An Introduction to few years, it’s a safe bet that deal making will continue as a time-tested way for
Our M&A Services companies to refocus, sometimes retrench and ultimately grow more profitably.
The Significant Seven It’s an equally safe bet that the risks of deal making will also increase, given the
mounting complexities of managing in a highly interconnected, technologically
sophisticated global environment. All this puts more pressure on business leaders
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to quickly demonstrate a deal’s financial and operational value.
Time Frame
Lessons
Organizational
Deal success always begins with the right strategy and transaction goals —
Readiness
whether for acquisition, merger, spin-off or divestiture. But ultimately, realizing
a deal’s value by any chosen metric comes down to how well the strategy is
Due Diligence From the
Front Lines
executed.
Integration Planning Over the years, Towers Watson has been involved in thousands of deals, helping
Implementation M&A teams conduct effective due diligence before closing and then plan,
of integrate and implement post-close. We have a deep bench of global experts, and
Domestic Deal Making considerable experience on the ground with virtually every type of domestic or
cross-border transaction across geographies and industries.
We know what works. More importantly, perhaps, we know how to identify and
Cross-Border and An Introduction to Our M&A Services handle the challenges and obstacles that inevitably arise — from struggles to
Emerging Markets retain key talent, to different agendas among organizational functions, to building
Spin-Offs, Divestitures an aligned leadership team, to integrating cultures, to helping affected employees
and Joint Ventures cope with uncertainty.
We’ve created this deal navigator to help you find the information you need quickly
Partnering With and easily — whether to prepare for an impending transaction or address an
Towers Watson ongoing situation. You can navigate by the phases of the typical deal process or
Insurance M&A by the type of deal. Throughout, you’ll also find references to what we call the
Services significant seven. These are the seven areas of critical value that can make or
break a deal’s success from an operational and workforce standpoint. They cut
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across every type and phase of a deal, and should form the core of your plan for
integration and implementation.
M&A Tools
Welcome to the fast-moving and ever-changing world of M&A.
Mary Cianni, Global M&A practice leader
The
Significant
An Introduction to
Our M&A Services
Seven
Explore by Deal The

Time Frame Keys
to
Organizational
Readiness
Deal Success
Due Diligence
There are seven areas that materially affect the success
of a deal. They come into play in virtually every type of
Implementation
deal and at every stage in the M&A life cycle to greater
Explore by Deal Type or lesser degrees, but they can’t be ignored or given
Domestic short shrift at any stage.
Cross-Border and Explore each area to see what’s involved and how
Emerging Markets
Towers Watson can help.
and Joint Ventures • Leadership
Partnering With • Culture
Towers Watson
Insurance M&A
• Change Management and Communication
Services
• Talent Management
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• Compensation
M&A Tools
• Benefits
• HR Service Delivery
The
Significant
An Introduction to
Our M&A Services
Seven
Explore by Deal The

Time Frame Keys
to
Organizational
Readiness
Deal Success
Due Diligence
Implementation
Leadership
Selecting, retaining and equipping the right leaders for the ••Customized assessment tools including 360-degree
Domestic new entity is critical to success, and identifying leaders who feedback surveys, structured behavior-based interviews,
Cross-Border and are capable of delivering on a new business agenda can be personality and leadership capability instruments, and
Emerging Markets daunting. Towers Watson’s support includes: business simulations
••Aligning executive performance and rewards with drivers of
Spin-Offs, Divestitures ••Assessing retention risks for executives and key talent
shareholder value
and Joint Ventures ••Designing financial and nonfinancial retention strategies and
vehicles
••Designing programs to enhance change leadership skills
Partnering With
••Conducting leadership assessments to identify the strengths
Towers Watson
and gaps in individual leaders, leadership teams and/or
Insurance M&A leadership segments
Services
Global Reach
M&A Tools
Change Management
Culture Talent Management Compensation Benefits HR Service Delivery
and Communication
The
Significant
An Introduction to
Our M&A Services
Seven
Explore by Deal The

Time Frame Keys
to
Organizational
Readiness
Deal Success
Due Diligence
Implementation
Culture
Reconciling different corporate cultures can be one of the ••Helping build an understanding of regional and local
Domestic toughest aspects of a merger or acquisition. And when cultural norms and nuances that will impact workforce
Cross-Border and a deal also involves workforces from different countries, policies, employee attitudes and the way work gets done
Emerging Markets language and culture issues compound the challenge. in cross-border situations
Towers Watson’s support includes: ••Incorporating cultural considerations into integration
plans and communications
and Joint Ventures ••Assessing the cultures of the various entities involved in
the transaction
••Developing an organizational culture change strategy
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and set of interventions to address and align differences
Towers Watson
••Choosing an approach and methodology to measure
Insurance M&A ongoing leader, manager and employee engagement
Services
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M&A Tools
Change Management
Leadership Talent Management Compensation Benefits HR Service Delivery
and Communication
The
Significant
An Introduction to
Our M&A Services
Seven
Explore by Deal The

Time Frame Keys
to
Organizational
Readiness
Deal Success
Due Diligence
Implementation
Change Management and Communication
Explore by Deal Type Communication and change management support are ••Developing and managing the content and deployment of
Domestic the glue that connects all the other areas of focus in a messages from the announcement through integration
transaction and ensures they move from the planning ••Developing materials and processes that address
Cross-Border and
Emerging Markets template to practical execution. Our work in this area internal stakeholder needs
includes: ••Creating a variety of media to deliver messages in the
Spin-Offs, Divestitures most effective ways, including websites and social media
and Joint Ventures ••Helping shape an engaging employee experience
throughout the entire transaction
••Developing a change management strategy and plan
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aligned with key integration milestones for each
Towers Watson
stakeholder group
Insurance M&A ••Building change leadership toolkits and providing training
Services for HR, leaders and managers
Global Reach ••Creating a strategy and plan for all leader, manager and
employee communication
M&A Tools
Leadership Culture Talent Management Compensation Benefits HR Service Delivery
The
Significant
An Introduction to
Our M&A Services
Seven
Explore by Deal The

Time Frame Keys
to
Organizational
Readiness
Deal Success
Due Diligence
Implementation
Talent Management
For some transactions, securing talent is the primary Our work in this area includes:
Domestic objective. But even when there’s another rationale —
••Analyzing the composition, flow, skills and cost of the
Cross-Border and gaining formal entry into a foreign market, for instance
current and projected workforce
Emerging Markets — the talent issue remains critical. What skills reside
••Identifying actions to close workforce gaps and
in the target’s workforce? To what extent are they
Spin-Offs, Divestitures implications for sourcing, deployment, engagement,
complementary, redundant or essential to closing strategic
and Joint Ventures rewards and development
gaps in the new organization? What will it take to retain
••Establishing an appropriate selection strategy, process
those people or functions critical to the business? When
and tools, including a staffing operations center
Partnering With and how can you identify who they are?
••Developing retention and transition plans to retain talent
Towers Watson
and ensure business continuity
Insurance M&A ••Deploying tools and processes to enhance managers’
Services ability to lead newly formed teams
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M&A Tools
Change Management
Leadership Culture Compensation Benefits HR Service Delivery
and Communication
The
Significant
An Introduction to
Our M&A Services
Seven
Explore by Deal The

Time Frame Keys
to
Organizational
Readiness
Deal Success
Due Diligence
Implementation
Compensation
Pay and benefit decisions send an early and important ••Drawing on our proprietary global databases to
Domestic signal to the workforce, shaping perceptions — benchmark programs against competitive norms and
Cross-Border and intended or not — about fairness, equity, consistency best practices, and recommend the right strategy
Emerging Markets and competitiveness. It’s important to set the right ••Using our Total Rewards Optimization (TRO) tool
strategy early for harmonizing programs — to what and approach to determine how to size and allocate
extent and over what time frame, as well as to ensure reward monies in alignment with business goals,
and Joint Ventures
that new programs will appropriately balance cost actual employee preferences and cost constraints
constraints with talent considerations. ••Aligning performance management programs to help
Partnering With drive the behaviors needed for success in the new
In this area, our support includes:
Towers Watson organization
••Providing side-by-side analyses of compensation ••Creating new global, regional and/or local salary
Insurance M&A
Services and performance management programs to structures, career frameworks and, as relevant,
clarify similarities, differences and key integration sales compensation programs
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M&A Tools
Change Management
Leadership Culture Talent Management Benefits HR Service Delivery
and Communication
The
Significant
An Introduction to
Our M&A Services
Seven
Explore by Deal The

Time Frame Keys
to
Organizational
Readiness
Deal Success
Due Diligence
Towers Watson’s support includes:
Implementation
Benefits ••Providing side-by-side analyses of benefit, workplace, work/life,
time-off and perquisite programs to clarify costs
For organizations that are still in the earliest stages of adopting ••Identifying key liabilities (e.g., pension) and accounting implications
Domestic a total rewards perspective for their benefits, pay and related (i.e., balance sheet, P&L, cash) as well as key integration challenges
Cross-Border and reward programs, a transaction can provide the opportunity to ••Understanding current and legacy benefit programs as well as
Emerging Markets accelerate their progress. A transaction often forces both parties local market trends, and cataloging those policies and procedures
to look not only across their differing benefit programs but to ••Drawing on our proprietary global databases to benchmark
consider those programs within a more cohesive global whole. programs against competitive norms and best practices, and
and Joint Ventures
That helps inform holistic decisions about how much they can recommend a cost-efficient benefit strategy
invest in total, and how to allocate that amount across programs ••Developing plan designs to support the new company’s total
Partnering With in line with legal and regulatory considerations, business goals, rewards philosophy and harmonize existing legacy programs
Towers Watson cost constraints and desired employee behaviors. A total ••Using our TRO tool and approach to determine how to size and
Insurance M&A rewards approach can also help inform decisions about when, allocate benefit investments within a total rewards structure in
Services how and where to harmonize various benefit programs, taking alignment with business goals, actual employee preferences, and
into account the varying local regulations, government subsidies, cost and legal constraints
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competitive and cultural norms, and other factors that come into ••Articulating broad benefit integration challenges, risks and
play when crossing borders. mitigation plans
M&A Tools
Change Management
Leadership Culture Talent Management Compensation HR Service Delivery
and Communication
The
Significant
An Introduction to
Our M&A Services
Seven
Explore by Deal The

Time Frame Keys
to
Organizational
Readiness
Deal Success
Due Diligence
Implementation
HR Service Delivery
The intensity of most transactions complicates the Our support in this area includes:
Domestic otherwise ongoing procedures for delivering services
••Developing an HR strategy, structure and service delivery
Cross-Border and to employees. It can affect everything from payroll, to
model that fits the needs, constraints and goals of the
Emerging Markets benefit enrollment, to fielding routine benefit questions
new organization
and changes, to running physical and virtual training, to
Spin-Offs, Divestitures ••Assessing, selecting and integrating HR technology
communication and technology implementations. The
and Joint Ventures systems
biggest challenge is keeping the delivery engine running
••Providing transition services — including ongoing payroll,
smoothly while reviewing and reconciling differences in
compensation, benefits and HR program support —
Partnering With how the various HR functions are structured, staffed and
during the transformation period to minimize interruption
Towers Watson managed.
and disengagement
Insurance M&A ••Assessing and harmonizing HR policies
Services
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M&A Tools
Change Management
Leadership Culture Talent Management Compensation Benefits
and Communication
An Introduction to
Our M&A Services
Explore by Deal
Time Frame
Organizational
Explore by Deal Time Frame
Readiness
Due Diligence • Organizational Readiness
Implementation
• Due Diligence
Domestic
Cross-Border and
• Integration Planning
Emerging Markets
and Joint Ventures • Implementation
Partnering With
Towers Watson
Insurance M&A
Services
Global Reach
M&A Tools
An Introduction to
Organizational Readiness
Our M&A Services The work required to close a transaction is significant
and varied. Given the increased complexity of deals
“Our
“ organization had to deal with a large number of
today, even experienced deal makers may not always acquisitions over the last two years, and our HR team
Explore by Deal
have the skills, resources or time required to execute
deals effectively and on schedule. New or occasional
had to hit the ground running. We turned to Towers
Time Frame
deal makers often struggle to determine the most Watson for help in ensuring we were prepared to deliver
Organizational efficient processes and find people to get the job done.
Readiness what the organization needed. The HR readiness
Towers Watson research and client experience confirm
Due Diligence that deals are concluded more successfully when HR
process gave our team a common framework and
Integration Planning addresses people and culture issues early, strategically language to deal with multiple, often complex, work
and with discipline. Our well-tested and rigorous
Implementation
readiness process can equip your HR team — even a streams, as well as standardized tools and approaches for
novice group — to handle the entire process, or we can due diligence and integration that helped us successfully
Explore by Deal Type provide a refresher in key areas. We assist across the
Domestic spectrum of activity, helping your team: stay on top of such a large volume of activity.”
Cross-Border and ••Evaluate the strategic deal rationale and fitness of — Dennis T. Leonard, Vice President of Global Total Rewards & HR Services, Arrow Electronics
Emerging Markets potential candidates — including their workforce
and culture, leadership styles, talent management
programs, cultural and communication styles, and HR
and Joint Ventures
and related workplace programs and practices that
could affect integration
Partnering With ••Assess potential costs and risks — including the total
Towers Watson cost of the target’s compensation, pension, health
Insurance M&A care, retiree medical, and related workforce and
Services reward programs
••Identify and prepare your staff to address the full
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range of integration issues — from identifying leaders
and retaining key talent, to harmonizing workplace
M&A Tools programs and managing the communication strategy
so critical to the success of any organizational change
M&A Readiness and Program Management Office (PMO) Services
Our flexible stand-alone or bundled M&A HR readiness services ••HR PMO Services
An Introduction to are tailored to fit your needs across any or all of the four phases Given the vast number of work streams and activities involved
Our M&A Services of a transaction. These include: in integration, an HR PMO can spell the difference between
success and failure in achieving deal goals. Our HR PMO
The Significant Seven ••Playbook Development
Services include:
An M&A Playbook is your HR guide for the entire M&A process.
••Providing strategic guidance for key decision makers to
Explore by Deal Customized to your unique circumstances, it includes a robust
ensure teams are focusing on the right priorities at the right
Time Frame set of tools and templates, and covers the latest HR best
times
practice standards for managing M&A activities, handling due
Organizational ••Acting as a hub for information and communication —
diligence, and assessing and integrating the people aspects of
Readiness connecting day-to-day activities with leadership priorities
the transaction. It enhances HR’s ability to partner with other
••Pinpointing accountability and ensuring execution
Due Diligence corporate teams by documenting connection points along the
••Delivering objective reporting to key stakeholders
way.
Integration Planning ••Managing the scope, schedule and budget, as well as the key
••HR Readiness Training
Implementation issues and risks
Our M&A HR Readiness Training is structured to prepare
••Developing greater collaboration among work teams
your HR team to play a more critical and influential role in
••Aligning stakeholders with a consistent set of priorities
Explore by Deal Type supporting future transactions. Whether you’re an experienced
••Creating tools and templates to streamline work effort
serial acquirer or starting your first deal, we work with you
Domestic
to customize the training curriculum to meet the skill needs For longer-term PMO support, we provide ongoing project
Cross-Border and of your team, the specific characteristics of your transaction management support to keep integration on track and manage
Emerging Markets history and any current deal activity. change issues throughout all aspects of implementation. And in
Spin-Offs, Divestitures the case of international or cross-border transactions, we bring
and Joint Ventures special expertise and experience in managing global PMOs.
Partnering With
Towers Watson “QBE
“ North America has grown substantially by acquisition in the last two years, more
than doubling the employee head count. Towers Watson has been our preferred HR
Insurance M&A
Services
partner to both support legal Day One operations and develop an HR harmonization
program for the different U.S. businesses around one common footprint. In addition
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to the large and varied HR complexities, Towers Watson performed a PMO function
and collaborated across other functional work streams to ensure alignment and manage
M&A Tools dependencies. QBE managed three distinct phases of HR acquisition, integration and
harmonization, and utilized Towers Watson on all three, based on the successes and
trust created in our partnership.”
— Kevin Sweeney, Head of Total Rewards, Human Resources, QBE The Americas
An Introduction to
Due Diligence
Our M&A Services
Surprises are never welcome in a transaction,
The Significant Seven especially if they’re discovered too late to address
the consequences. So it’s critically important to Case in Point
Explore by Deal undertake the necessary detective work — as early
To expand its market, a U.S. electric and gas utility was considering a bid
Time Frame in the process as possible — around business and
for a rival electric company. But when the company conducted its HR due
culture fit, workforce program costs and liabilities,
Organizational diligence, it discovered that the target was saddled with an underfunded
policies, and integration goals and strategy. We work
Readiness pension plan and accompanying rich retiree medical plan. Although the
with your team to:
underfunding was severe, the company felt the acquisition was central
Due Diligence to its business strategy, so it opted to renegotiate the price to offset
••Identify costs, liabilities and accounting implications
Integration Planning for the target’s retirement, health care, retiree the additional unanticipated cost. It was also able to address some of
medical and other reward programs the cost issues via a new benefit strategy that included offering retirees
Implementation
••Understand current and legacy programs as well as lump sum annuities, freezing the pension plan to new entrants, and
local market trends establishing a defined contribution retiree medical plan through a private
Explore by Deal Type ••Determine gaps in programs and integration risks/ exchange for current retirees and pre-retirees.
Domestic issues
••Identify individual contract issues
Cross-Border and
••Review all executive compensation contracts and
Emerging Markets
vehicles “Towers
“ Watson ensured that our due diligence was
Spin-Offs, Divestitures ••Assess individual retention risks
and Joint Ventures ••Conduct a high-level culture overview based on data
successful — getting the right resources on the ground
room information, observations and conversations across different cultures and languages — and helped
Partnering With
Towers Watson View View
develop our HR M&A Playbook. They had a strong
Insurance M&A
Towers Watson’s Towers Watson’s understanding of our business and corporate strategy,
Due Diligence Global M&A
Services
Tools Retention Findings and brought their considerable transaction experience to
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bear in helping deal with our particular situation. They
M&A Tools
are an indispensable partner to Hershey in helping us
achieve our growth goals efficiently and effectively.”
— Debora Robare, Senior Director, Global Benefits, The Hershey Company
An Introduction to
Our M&A Services Once the deal has closed, the hardest work begins.
The Significant Seven Depending on how much change it brings for individuals
across the organization, the deal’s completion tends Case in Point
Explore by Deal to usher in a period of intense highs and lows in the
When a highly respected global high-tech company decided to acquire a smaller
Time Frame workforce that can cut into productivity and raise
start-up to increase market share and expand its global footprint, it seemed like
anxiety. People will likely have new managers, different
Organizational a straightforward transaction. But success depended on retaining the key talent
colleagues, new tasks and, often, different pay and
Readiness that had built the start-up into an innovation powerhouse. Other risks included an
benefit programs. Keeping operations running smoothly
extremely short transaction timeline and big differences in corporate cultures.
Due Diligence takes planning, time, resources and focus.
First, the acquirer set up a PMO to ensure it could handle all the work streams
Integration Planning We help set priorities for the first 100 days, and
associated with the integration of the two companies. Then, its deal team used
prepare HR and other specialty teams for this pivotal
Implementation culture diagnostics to identify key gaps in culture and employee experience.
period. Depending on your needs, we also supply
Using that information, it developed talent management and total rewards
disciplined HR PMO support. Specific support during
strategies to foster the creativity and collaboration that had made the start-up
Explore by Deal Type this phase includes:
a success. It also launched a new, company-wide, long-term incentive program
Domestic ••Building a shared vision for the integration and that appealed to the talent segments identified as key to long-term growth. The
Cross-Border and beyond, working with the new leadership team and multifaceted strategy worked, with high levels of retention both immediately and
Emerging Markets defining the characteristics of an integrated culture over the longer term.
that supports the business strategy
and Joint Ventures
••Providing employees with the information they need,
when they need it, and advising ways to address “As
“ a company that is continuously growing through acquisitions, GE is
questions and concerns whose answers aren’t yet committed to ensuring a seamless cultural integration process. A key step in
Partnering With clear accomplishing this is the cultural assessment work we do with Towers Watson.
Towers Watson ••Reviewing current jobs and roles, and creating a job The assessments give us a deep understanding of employees’ perceptions about
Insurance M&A architecture and role definitions appropriate for the the culture, help us monitor levels and key drivers of employee engagement,
Services new organization and its longer-term goals and gauge the effectiveness of our culture integration plans. The insights we
••Evaluating all existing reward programs and gather are crucial in refining our integration process, and identifying enablers
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recommending what and where to harmonize or and barriers to a successful integration.”
integrate, and over what time frame — taking into
M&A Tools account talent management, financial and risk factors — Karunesh Prasad, Culture Integration Leader, GE Oil & Gas
••Helping balance competing priorities: from delivering
View View
day-to-day HR services, to supporting business Towers Watson’s Towers Watson’s
integration needs, to integrating the HR function and Integration Planning Global M&A
technology systems Tools Retention Findings
An Introduction to
Implementation
Our M&A Services Embedding change successfully is both a rational
The Significant Seven and emotional process. It takes time, concentrated
leadership and management attention, and well-
Explore by Deal defined programs and processes that give employees
Time Frame a clear and consistent view of the new organization
and what it stands for. The day employees start
Organizational identifying themselves as part of the new entity, rather
Readiness than their legacy company, is the day a company
Due Diligence knows it has begun a successful implementation.
How quickly and smoothly that happens depends on
a range of factors, including the size and scope of
Implementation the transaction, the number of people and countries
involved, the organization’s openness and flexibility,
Explore by Deal Type and its willingness to work the process fully through to
completion.
Domestic
Our proprietary tools and techniques can help you
Cross-Border and
manage the entire range of implementation challenges:
Emerging Markets
••Leadership development
and Joint Ventures
••Change management consulting
••Employee engagement surveys
••Team building and conflict resolution
Partnering With ••Training design and development
Towers Watson ••Personal and group communication development
Insurance M&A ••Systems analysis and process reengineering
Services
Global Reach
M&A Tools
View View
Towers Watson’s The
Implementation Significant Seven
Tools Critical Value Areas of a Deal
An Introduction to
Our M&A Services
Explore by Deal
Time Frame
Organizational
Readiness
Due Diligence • Domestic
Implementation
• Cross-Border and Emerging Markets
Domestic
Cross-Border and
• Spin-Offs, Divestitures and Joint Ventures
Emerging Markets
and Joint Ventures
Partnering With
Towers Watson
Insurance M&A
Services
Global Reach
M&A Tools
An Introduction to
Domestic
Our M&A Services Doing a deal in your own country generally remains ••Provide employees with the right amount of
The Significant Seven the most prevalent type of transaction, particularly information, at the right time, in an effective and
in large, diverse countries like the U.S. or China, engaging fashion
Explore by Deal where the M&A options are many and varied within ••Get the right people, with the right skills, into the right
Time Frame national borders. It’s tempting to assume that roles for both the short and long term
buying or merging two companies in the same ••Integrating your overall reward programs and policies
Organizational country simplifies the deal process, but other than to balance attraction, retention and engagement
Readiness having fewer or no language or national cultural needs against cost and risk factors
Due Diligence barriers, experience proves otherwise. Domestic ••Balance competing priorities — delivering day-to-day
deals still bring significant risks and challenges, HR services, supporting business integration needs,
in part because the many apparent similarities and integrating the HR function and systems
Implementation between the entities may lead the deal makers to
miss or underestimate significant differences —
Explore by Deal Type especially if the organizations are from the same
industry or region.
Domestic
We’ve helped hundreds of organizations conduct
Cross-Border and
domestic deals to expand their market share
Emerging Markets
within their borders, remove a competitive threat,
Spin-Offs, Divestitures or enter into new product or service areas. We
and Joint Ventures work with your deal team to:
••Identify pension liabilities and other accounting
Partnering With implications while determining gaps in programs
Towers Watson and integration risks/issues
Insurance M&A ••Build an aligned vision for the integration and
Services beyond, including effective leadership teams and
an integrated culture that supports the business
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strategy
M&A Tools
An Introduction to
Cross-Border and Emerging Markets
Our M&A Services
Cross-border deals are growing in number and size — We work with you to: “Towers
“ Watson
The Significant Seven especially outside North America — although they still
••Review and fully understand the deal context, country continues to impress
remain the least prevalent type, largely because they us with their strong
nuances and key areas of risk during due diligence,
Explore by Deal require a level of management, coordination, integration M&A HR integration
especially in an unfamiliar country or emerging
Time Frame and implementation that many companies have yet expertise, deep
market where conducting the thorough due diligence
to master. But they will need to develop that mastery understanding of our
Organizational buyers in developed economies take for granted can
over time to compete effectively for capital, resources,
Readiness be far more difficult company’s business, and
customers and workers in the global economy.
••Prepare for post-closing due diligence to resolve any precise interpretation
Due Diligence
In the case of emerging-market deals, challenges and local country issues not fully addressed pre-close of local policies and
Integration Planning complexities can exceed those in more traditional cross- ••Address talent and leadership retention — a key regulations. Their
Implementation
border situations. For instance, with anticorruption and business risk in cross-border and emerging-market approach of customer-
anti-bribery laws under stricter enforcement, regulators deals first and pragmatic
are now holding U.S. corporate buyers accountable ••Set a total rewards philosophy and strategy that
Explore by Deal Type working style is not only
for prior U.S. Foreign Corrupt Practices Act violations, appropriately reflects the corporate needs but
evident in our project
Domestic even if those violations were not known at the time of takes into account unique local conditions and
purchase. The impact is being felt by sellers in high- requirements outcomes but also in the
Cross-Border and
growth markets as they share relevant information more ••Help design and implement reward programs, as mutual collaboration we
Emerging Markets experience throughout
readily and by acquirers as they conduct more thorough required
Spin-Offs, Divestitures due diligence. ••Identify an approach to HR oversight/governance, the process. We look
and Joint Ventures including oversight of local decision making forward to continuing
For both cross-border and emerging-market deals,
••Address local employee communication and our relationship and
cultural differences are typically also more pronounced,
Partnering With since both the companies involved and their
consultation requirements achieving even more
Towers Watson ••Evaluate the right approach to supporting the HR successes in the future.”
headquarters countries are likely to be at different
infrastructure (payroll capabilities, policies, systems
Insurance M&A stages of development from a business standpoint. The 招商局集团人力资源部
and procedures) — whether through on-the-ground
Services risk of talent loss can skyrocket. — China Merchants Group
resources and support, a shared service approach or
Global Reach Our presence in 38 countries gives us specific a fully outsourced model Human Resources
knowledge and insights that can make a crucial
M&A Tools difference in addressing regulatory and cultural factors,
among other challenges. View View
Towers Watson’s The
Culture Significant Seven
Tools Critical Value Areas of a Deal
An Introduction to
Spin-Offs, Divestitures and Joint Ventures
Our M&A Services
The catchall term “M&A” is commonly understood to In these areas, Towers Watson can help: “When
“ Eastman Kodak
The Significant Seven cover a far broader set of transactions than mergers Company divested its
••Assess retention risks, and design strategies,
and acquisitions. Lately, more than ever, these include Personalized Imaging
and financial and nonfinancial approaches to
Explore by Deal spin-offs, divestitures and joint ventures, which and Document Imaging
retain critical talent
Time Frame business executives often view as a way to return value Businesses — to form
••Create processes and tools to drive the selection
to shareholders amid challenging market conditions.
Organizational process for leaders our new company, Kodak
Senior management is constantly examining business
Readiness ••Develop executive transition plans, and equity Alaris — we knew we
units that aren’t closely aligned with the company’s core
and/or incentive plans for the new entity had to be completely
Due Diligence business or have persistently low-growth rates — and
••Conduct analyses of future workforce needs and ready for Day One. By
choosing to spin them off or divest completely in order
Integration Planning gaps partnering with Towers
to achieve their bottom-line financial goals. And they’re
Implementation
••Assess the culture of the parent company, and Watson, we were able
often simultaneously setting up joint ventures with one
develop recommendations and a change strategy
or more partners in order to reach growth goals that to quickly and painlessly
that leads to the right culture for the new entity
Explore by Deal Type they couldn’t achieve on their own.
••Benchmark current rewards against competitive
address retirement and
Spin-offs and divestitures can be strategic, operational norms and best practices, and recommend an benefit issues for 4,000
Domestic
and financial game changers. They may lead to appropriate reward strategy employees in 35 countries,
Cross-Border and and ensure that they all had
additional restructuring, require corporate support ••Review benefit, workplace, work/life, time-off and
Emerging Markets
for new operational functions or otherwise introduce perquisite programs to understand liabilities and benefits coverage in place
Spin-Offs, Divestitures new organizational complexity in managing the spin-off challenges by deal close. Following
and Joint Ventures financials. Common challenges include lack of a ••Develop an HR strategy, structure and service a successful launch of our
detailed divestiture process, failure to plan the new delivery approach that reflects the needs of the new company, we are
Partnering With organization, resource allocation issues, and an overall new entity now working with our
Towers Watson miscalculation of the complexity and importance of ••Establish a framework for transition services Towers Watson team on
people issues. ••Develop an overall change management strategy key implementation issues,
Insurance M&A
and communication plan including helping to build
Services And in the case of joint ventures, problems that arise
Global Reach
can often be traced to the early stages of negotiations: a leadership team and a
the leaders selected to represent each company, their new global HR function
preparation, and their advisors’ type of advice or level for Kodak Alaris.”
M&A Tools of experience.
View — Gary Fisher, HR Director,
The Kodak Alaris
Significant Seven
Critical Value Areas of a Deal
An Introduction to
Our M&A Services
Case in Point
A multibillion-dollar global conglomerate headquartered in the U.S. with
Explore by Deal employees in 30 countries decided to spin off two businesses — an
Time Frame industrial air company and a defense supplier — it felt would fare better
operating separately. The deal required coordinating the spin-offs across
Organizational multiple countries with limited data on the non-U.S. employees, and ensuring
Readiness that employees of the divested companies had appropriate employment
Due Diligence offers and compensation and benefit packages as of Day One. Because
of the complexity of the deal, HR started with organizational readiness —
developing a playbook to follow throughout the process, training HR staff
Implementation and establishing the PMO. It then turned its attention to building unique
compensation and benefit programs that were appropriate for the smaller
Explore by Deal Type size of the new companies, and for the types of employees being hired or
retained. The plans needed to have a common philosophy, yet conform
Domestic
to local regulations. Before Day One, HR had successfully established
Cross-Border and HR functions for all the businesses and had leaders in place at each
Emerging Markets organization. Communications to employees were also well under way — and
Spin-Offs, Divestitures a schedule had been set for regular communications over the next year, with
and Joint Ventures compensation and benefit programs up and running.
Partnering With
Towers Watson
Insurance M&A
Services
Global Reach
M&A Tools
An Introduction to
Our M&A Services
Explore by Deal
Time Frame
Organizational
Partnering With Towers Watson
Readiness
Towers Watson has the experience, knowledge and Equally important is how we work with you. We view
Due Diligence expertise to help your organization achieve its deal ourselves as part of your team, and we anticipate
Integration Planning objectives, no matter the deal type, location, time being on site, working alongside you, throughout the
frame or business sector. Our global team has worked process. We take a collaborative approach, with a
Implementation on thousands of transactions across industry sectors focus on understanding and working toward deadlines
and geographic borders, participating in every phase and goals, identifying and helping address issues as
Explore by Deal Type from target evaluation, through due diligence, to post- they arise.
deal integration.
Domestic We know M&A. Shouldn’t you know us?
Cross-Border and This breadth of experience, coupled with our extensive
Emerging Markets research-based knowledge of the employee mindset
and human resource and benefit issues, gives us a
strong foundation to help you make the right decisions
“Towers
“ Watson has been a partner to BP for many
and Joint Ventures
for your workforce. Our practical experience also years, working with us on multiple transactions
means we know how to shape solutions to reflect
Partnering With specialized industry and cultural distinctions and
and helping to build up our internal capabilities.
Towers Watson nuances. While we understand that each deal is as We can count on them any time of the day, any
unique as the organizations entering into it, we also
Insurance M&A
Services know how to apply a time-tested set of processes and day of the week, to provide focused support for us
Global Reach
tools to bring clarity, efficiency and order to what often and our business partners going through deals.”
feels like a chaotic process.
— Gary Hibbard, M&A Manager, BP*
M&A Tools
*Quote reflects personal views.
An Introduction to
Our M&A Services
The Significant Seven Inside the Insurance Industry: Specialized Expertise
Towers Watson’s Insurance M&A Services Due Diligence
Explore by Deal Towers Watson has the combination of deep ••Financial and risk due diligence
Time Frame life and property & casualty (P&C) insurance ••Investment/ALM due diligence
industry knowledge and M&A expertise to help ••Distribution and strategic due diligence
Organizational
companies identify, evaluate and execute corporate ••Reserve adequacy and claims
Readiness
transactions. ••Pricing and underwriting capability
Due Diligence ••Capital management and modeling
As the largest global consultancy focused on the
Integration Planning ••Operational efficiency
insurance industry, our experts understand the
••Transaction structuring
Implementation business of insurance. Our expertise spans the
••Negotiation support
entire M&A process — not just one phase of the
process or one specific technical skill — which Implementation
helps ensure that clients’ transactions achieve their ••Regulatory support
Domestic objectives. We assist insurance (and reinsurance) ••Integration planning
Cross-Border and companies as well as investment bankers and ••Post-merger integration/execution
Emerging Markets private equity firms with merger, acquisition, sale ••Financial modeling
and restructuring transactions. ••Distribution
Spin-Offs, Divestitures ••Restructuring
and Joint Ventures Our services include but are not limited to: ••Underwriting strategy
Strategy and Planning ••Deal debrief
Partnering With ••Strategy formulation and international/regional ••Post-deal evaluation
Towers Watson market understanding ••Purchase accounting
Insurance M&A
••Initial assessment and review of alternative
For more information on our insurance
Services options
M&A consulting offering, please contact your
••Robust and documented windshield appraisals of
Global Reach Towers Watson consultant or visit us at
potential targets
Towers Watson’s Insurance M&A Services.
••Managing stakeholders
M&A Tools ••Team and process organization/education
An Introduction to
Our M&A Services
Global Reach
Explore by Deal Our 14,000 associates in 38 countries and regions
Time Frame work together to deliver the perspectives that give
Organizational your organization a clear path forward.
Readiness ••Argentina ••Mexico
Due Diligence ••Australia ••Netherlands
••Austria ••Philippines
••Belgium ••Portugal
Implementation ••Bermuda ••Russian Federation
••Brazil ••Singapore
Explore by Deal Type ••Canada ••South Africa
••Chile ••South Korea
Domestic ••China ••Spain
Cross-Border and ••Colombia ••Sweden
Emerging Markets ••France ••Switzerland
••Germany ••Taiwan
and Joint Ventures ••Hong Kong ••Thailand
••India ••Turkey
••Indonesia ••United Arab Emirates
Partnering With ••Ireland ••United Kingdom
Towers Watson ••Italy ••United States
Insurance M&A ••Japan ••Uruguay
Services ••Malaysia ••Vietnam
Global Reach
M&A Tools
An Introduction to
Our M&A Services
Tools and Resources
Explore by Deal
Having the Right Tools and Resources to Help the Deal Go Smoothly
Time Frame
Organizational Regardless of the kind of transaction you are planning, Towers Watson brings a multitude of sophisticated and
Readiness proven tools to any deal, including due diligence checklists and data requests, reporting templates, transaction
Due Diligence road maps, and others to support all aspects of people and culture integration. Here is just a snapshot of some of
our tools, templates and other resources:
Implementation Organizational Readiness Due Diligence
••HR Readiness Training: Flexible stand-alone or ••BenTrack Side by Side: Detailed, side-by-side
Explore by Deal Type bundled M&A HR readiness services tailored to fit comparison of benefits with the capability to pull in
Domestic your needs across any or all of the four phases of a peer-group data and determine valuation of programs
transaction ••HR Due Diligence Request: List of required
Cross-Border and ••Playbook Development: HR guide for the entire information, including General, Compensation,
Emerging Markets
M&A process, covering the latest HR best practice Benefits, Industrial Relations, Employee Census Data,
Spin-Offs, Divestitures standards for managing M&A activities, handling due Talent, Culture and Legal
and Joint Ventures diligence, and assessing and integrating the people ••Side-by-Side Comparison of Programs and
aspects of the transaction Practices: Broad-based, side-by-side comparison of
Partnering With ••Program Management Office (PMO) Toolkit: programs, policies and procedures with high-level
Towers Watson Our change-enabled PMO Toolkit can remove the recommendations
administrative burdens to focus on issues that matter ••Culture Assessment: Tools to support the deal
Insurance M&A most and bring objective rigor to the process team in documenting and assessing initial cultural
Services
observations and findings
Global Reach
M&A Tools
Learn more about our
HR Readiness and
Program Management
Office Services
An Introduction to Integration and Implementation Culture
Our M&A Services ••Culture Alignment Tool (CAT): Culture diagnostic
Change Management and Communication
that enables legacy organization executive leadership
••Change Management Plan: Sample high-level change
to test alignment quality between current attributes
plan identifying key activities and deliverables for
and new strategy, and even more important, ranking
Explore by Deal strategy and implementation phases
of attributes, given planned strategy shifts
Time Frame ••Change Management Two-Week Game Plan:
••Culture Cross-Match: Culture diagnostic that helps
Visual format for two-week snapshot of activities
Organizational employees pinpoint their company’s attributes across
by stakeholder group and change lever (leadership,
Readiness a spectrum of relevant possibilities
involvement, learning, etc.)
••Culture Executive Interview Guide: Guide for
Due Diligence ••Communication Plan: Full-scale sample
conducting culture interviews with executives
communication plan across all four phases of a
Integration Planning ••Culture Focus Group Guide: Guide for conducting a
transaction with its own subset of tools, including:
Implementation focus group to measure employee perspectives on
••Announcement Employee Package
current culture, as well as values and behaviors
••Announcement Planning Guide
••Culture Change Road Map: Sample guide for
Explore by Deal Type ••Day One Employee Experience Communication
achieving culture change objectives
Planning
Domestic ••Merger Monitor: Survey tool that identifies and
••Integration Planning Newsletter
tracks progress on key deal priorities, including
Cross-Border and ••Selection Criteria for M&A Communication Team
Emerging Markets
drivers and levels of turnover and employee
••Integration Team Communication Planning
engagement, to help fine-tune post-merger integration
Spin-Offs, Divestitures Workshop
planning and execution.
and Joint Ventures ••Senior Leadership Interview Guide
••Communication Team Kickoff Presentation Leadership
••100 Sample Employee Questions ••Change Leadership Toolkit: Sample toolkit for leaders,
Partnering With covering responsibilities and materials to use post-close;
••Integration Plan: Sample plan for pre-close, Day One
Towers Watson includes meeting exercises and a pre-close checklist
and first 100 days
Insurance M&A ••Online Employee Opinion Surveys: Employee ••Leadership 360-Degree Assessment: Multi-rater
Services surveys that draw on advanced analytics, leading- input either through traditional 360-degree feedback
Global Reach edge technology and the world’s largest normative survey or through targeted qualitative, confirmatory
database of employee attitudes interviews with key stakeholders
••Stakeholder Analysis Template: Matrix of stakeholder
M&A Tools importance and commitment, and template for Learn more about our
planning influence response HR Readiness and
Program Management
Office Services
An Introduction to Talent Management — Retention and Selection Total Rewards
Our M&A Services ••Talent Retention Analysis: Outline for identifying key ••Total Rewards Optimization (TRO): Online modeling
retention criteria and candidates tool that uses a rigorous, quantitative analytic
••Re-Recruitment Tool: Tool to support leaders in process to help organizations optimize their reward
determining individual retention actions related to job investment
Explore by Deal and career opportunities
Time Frame ••Selection Process Overview: Sample presentation
Organizational for early discussion on building the selection process
Readiness ••Selection Success Measures: List of potential
success measures to guide development of selection
Due Diligence
approach
Integration Planning ••Selection Guiding Principles: Sample set of
Implementation principles to guide development of selection
approach and process
••Executive Candidate Selection Slates: Templates
Explore by Deal Type documenting candidates reviewed and recommended
Domestic for executive positions
••Employment Termination Planning: Template for
Cross-Border and
Emerging Markets
reaching decisions on termination processes (can be
used as an HR manual after the transaction)
Spin-Offs, Divestitures ••Selection Leader Training: Provides leaders with
and Joint Ventures relevant information, timelines and talking points to
guide their role in completing the selection process
Partnering With ••Selection Weekly Scorecard: Summary statistics for
Towers Watson completed selection activity
••Project Plan: Staffing and Retention: Sample project
Insurance M&A
Services
plan for staffing and retention tasks from integration
planning through post-close
Global Reach
M&A Tools
Learn more about our
HR Readiness and
Program Management
Office Services
An Introduction to
Successful Tactics
Our M&A Services
The Significant Seven for Keeping Top Talent
Explore by Deal
Time Frame To examine employers’ success in retaining essential ••Use cash bonuses (rather than other types of
employees during a corporate transaction, we surveyed retention bonuses) more often and are more likely
Organizational
248 organizations in 14 countries. In our 2014 Global to include them — alone or with other forms of
Readiness
M&A Retention Study (our second study on talent compensation — in retention agreements: 80% of
Due Diligence retention in M&A transactions), we looked at the high-retention employers use cash bonuses for senior
effectiveness of retention agreements — used by many leaders, and 89% use them for other employees,
employers to keep top talent on board. versus 50% and 55%, respectively, for low-retention
Implementation companies
We found that employers that successfully retain more ••Are less likely to rely on data from the target
than 60% of retention candidates for the full retention company’s HR systems to identify retention
period (high-retention companies) use strategies and candidates — only 28% of high-retention companies
Domestic tactics different from those used by companies with use job description data, whereas 58% of low-
Cross-Border and retention rates of 40% or lower (low-retention companies). retention companies use it, with just 36% of high-
Emerging Markets retention companies using reporting-level information,
Compared with low-retention employers, high-retention
Spin-Offs, Divestitures employers: versus 67% of low-retention companies
and Joint Ventures ••Offer higher-value retention packages — among high-
••Are more likely to identify retention candidates based retention companies, the median value of retention
on the employee’s ability to affect the success of the packages offered to senior leaders is 60% of base
Partnering With
transaction: 73% of high-retention companies and salary, versus 35% for low-retention companies, with
Towers Watson
only 33% of low-retention companies do this a lesser disparity in retention packages offered to
Insurance M&A ••Are more likely to consult the target company’s senior nonexecutives (28% of base salary versus 16%)
Services leadership in determining which employees to keep: To learn more about Towers Watson’s 2014 Global M&A
Global Reach 66% versus 27% Retention Study and for a copy of the report, go to
••Are significantly more likely to consider management 2014 Global M&A Retention Study Report.
discretion — that is, the opinion of the target
M&A Tools
company’s leadership — in selecting employees for
retention agreements: 32% versus 8%

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Navigating to M&A Success

A Guide to the What, When and How of Effective Deal Making

Explore by Deal Type

Explore by Deal The

Explore by Deal The

Explore by Deal The

Explore by Deal The

Leadership Culture Talent Management Compensation Benefits HR Service Delivery

Explore by Deal The

Explore by Deal The

Explore by Deal The

Explore by Deal The

*Quote reflects personal views.

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Navigating to M&A Success

A Guide to the What, When and How of Effective Deal Making

Explore by Deal Type

Explore by Deal The

Explore by Deal The

Explore by Deal The

Explore by Deal The

Leadership Culture Talent Management Compensation Benefits HR Service Delivery

Explore by Deal The

Explore by Deal The

Explore by Deal The

Explore by Deal The

*Quote reflects personal views.

S-ar putea să vă placă și

M&A

M&A