Case Study: Mergers and Acquisitions

Roger had lived through both sides of "deal fever" a number of times, but nothing had prepared him for the disappointment and pressure he felt three years ago when the Valvol joint venture was completed - it was almost like a silent accusation hanging over his head.  He had been the General Manager of the fabrication division across a number of plants in a medium size conglomerate when the whole group became a takeover target for a multinational processor and distributor.  The deal had taken almost fourteen months to negotiate, and been diverted down blind alleys a few times when other suitors had jumped into the fray.  It had been nerve wracking, but exhilarating too as the competition drove the deal price up to unimagined levels.
 
And so it had closed at sky-high levels, and the press had called the $7B US deal the "Steal of the Century".  But who stole what from who?  Roger had been reappointed to his same job under a new title in the merged company, and as the adrenalin wore off and the new owners drilled down past due diligence depth he started to sense some dissatisfaction directed towards him.  His results were no worse than they had been before the negotiations started, and he resented suggestions that reality has been masked by the way the accounts were presented.  To make it worse, some other similar divisions brought in from the other entity were setting much higher benchmarks across a number of performance indicators, and Roger had no idea what they might be doing differently.
 
Roger considered cashing in his options and seeking new horizons, but he also felt intrigued and challenged by the supposed superiority of those other divisions and felt a loyalty to his team whom he sensed might wind up as scapegoats if he left.  So before he took any decisive action, he called in Zaffyre, who had advised a respected colleague of his a few years back.

Zaffyre convinced him to stop seeing the new owners and the other divisions as "bad guys", and to at least take the opportunity to learn more before he made up his mind.  They also convinced him that the first thing he needed to learn more about was what his own division was doing, and not to expect that the others were in possession of some magical formula for success.
 
Under Zaffyre's guidance, Roger and his team worked together as they had never worked together before, and what emerged was a totally different and unexpected picture of their current business, their options, and their opportunities.  

The performance of the other divisions faded to a mild distraction as they understood, accepted, and decided to change things that had previously been ignored or thought outside their influence or accountability. They began to work with their customers to deeply understand and undertake the necessary steps to satisfy their true needs, and then they went back to engineer it into their supply chain to optimise cost and efficiency.  As they tapped into the collective knowledge and commitment of their employee groups, who were increasingly proud of their division's novel approach, they saw opportunities for interactions with the whole communities in which they operated.  Far from their previous uneasy low profile, their facilities became synonymous with good corporate citizenship.  By understanding their supply chain and the uses that customers made of their products, each facility was able to sponsor local projects that offset industry impacts on the environment and educated the community about responsible use of their products.
 
Roger and his team never did find out what those other divisions were doing, but within three years they were not only producing record breaking profits over their own history, they were leading the company over all functions and divisions on profit and all other key indicators such as safety and employee retention.  Valvol's share price was at an all time high, and the analysts attributed to their genius in acquiring an undervalued asset in the takeover - namely the world class fabrication division that Roger led.  

Roger was glad that he had stayed - and glad that he had called in Zaffyre to help him to discover the treasure in his own back yard.

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