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Mergers and acquisitions in a virtual world

How are M&As affected when you can’t look someone in the eye and shake their hand?

Mergers and Acquisitions
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June 23, 2021

In this article, three HR leaders explain how they adjusted their working practices during the pandemic.

The speakers

  1. Andrea van Duijse, Global HR Manager of Group Mergers, Acquisitions and Divestments at Shell
  2. Katja Greczmiel, Head of Global People and Organization Standards and Mergers and Acquisitions at Novartis
  3. Philip Johnson, European HR Leader of Mergers, Acquisitions and Divestitures at IBM

Panel chair: Gabe Langerak, Senior Director at Willis Towers Watson

Gabe Langerak (GL): Philip, in the first half of 2020, when deal volumes slowed, how did this affect how you were looking at deals which were in progress?

Philip Johnson (PJ): It was an interesting time. We were entering into an environment we had never been in before and we had deals which were at different stages. When you are divesting, you have more control over how you communicate with existing employees. But when acquiring a company, communications are not within your control and nor is the way the crisis is managed.

When we entered lockdown, we were in the process of acquiring a software development lab, so we were not able to tell them what to do. In IBM we were working very carefully and our core emphasis at that time was on safety. There we were with a development lab that we wanted to acquire. We wanted to make sure they were feeling comfortable as we closed the deal and got into the integration process.

I drove from Scotland to London so we could meet the CEO to confirm our plans for retention planning, which is a very important discussion. We met everyone we could when we travelled down, but all the other retention discussions were done over WebEx. That was the first time we got into a people-sensitive topic virtually. Overall, I am pleased to say, we have had 100% retention so far.

Katja Greczmiel (KG): For me, it was a little bit different. At Novartis, I work with people who are spread all across the world and we connect to discuss certain topics, we have remote team meetings and so forth. So, it was business as normal.

However, when it came to preparing for day one and integration meetings with an acquisition target, that was another story. Before the lockdown, we had planned to travel to meet them. While there was no lockdown, we worried that people might get stranded abroad and took the decision to cancel the event.

We quickly reassessed how we would run this in a remote environment. We couldn’t run welcome events in the same way we would have done physically, and our new acquisition was in a different time zone. Therefore, we adjusted the timings, spread the event across a couple of days and allowed for breaks. For the activities afterwards, we needed to rely on the remote teams, so we made sure they were well briefed. It really worked. Actually, I think it was as good as it would have been if we had gone and had a meeting physically, albeit different.

I think it was as good as it would have been if we had gone and had a meeting physically, albeit different.”

Katja Greczmiel | Head of Global People and Organization Standards and Mergers and Acquisitions, Novartis

GL: Andrea, do you see any future challenges with performing due diligence virtually?

Andrea van Duijse (AvD): We already did a large part of due diligence virtually anyway. I call that the desktop detective work, going out and finding out as much as possible about a target company. But there is also a large face-to-face side to our due diligence; it is getting a sense of the place, having face-to-face interviews with leaders and so on. We’ve looked at how we can achieve the same outcomes virtually.

For buyers of our divestitures, we flew a drone over the site so they could familiarize themselves with the layout. In follow-ups, we would have an employee with Google glasses on the site speaking on the phone with a potential buyer, with the buyer directing the individual where to walk on the site, so they could basically go anywhere they wanted but in a virtual way.

When we are making acquisitions, we usually interview the key staff. We do that now through video call. Whilst it’s not the same, it’s a lot better than nothing. We have adjusted the questions that we normally ask. I think it is really interesting to ask senior leaders of target companies how they are adapting their leadership style in the COVID period. It says a lot about leaders, how they are adjusting their sites, how they are caring for their people, how they are thinking about the future of work.

It says a lot about leaders, how they are adjusting their sites, how they are caring for their people, how they are thinking about the future of work.

GL: What have been some of the challenges in this time?

PJ: I always say you cannot beat physically meeting the people you are dealing with. Physical meetings reduce the risk, as there are more opportunities to ask questions. As a result, we have turbocharged our relationship with technology. We have invested quite a bit of time in connecting with our teams after due diligence – more than we would have done when we worked together – so that we can exchange our observations.

We have turbocharged our relationship with technology”

Philip Johnson | European HR Leader of Mergers, Acquisitions and Divestitures, IBM

GL: Katja, what are your takeaways from the last year, and how are you going to build them into how you work going forward?

KG: Reflecting on it, I have to say I am really positive. Working from home across geographies, you can take meetings early in the morning or fairly late, so that’s fantastic.

Also, there are no more situations where you have a big team sitting in a conference room and then there are one or two people sitting remotely. You don’t have someone in the conference room drawing something on a flipchart which isn’t visible. We are all sitting at home, so we all have the same experience.

I find the focus on time efficiency really helpful. In the past, when we joined a meeting in a meeting room, we would stay there until it ended, even though we were just needed for 15 minutes. With new technology, we feel it’s more acceptable to only join for the first 15 minutes and then go off and join another meeting.

With new technology, we feel it’s more acceptable to only join for the first 15 minutes and then go off and join another meeting.

AvD: I totally recognize the efficiency gains that Katja talks about. I have built supportive relationships with colleagues in the past year that have helped us get through this period as well. I think we will see a further strengthening of that in the future.

We will certainly challenge ourselves more on travel, because there is definitely an efficiency increase when you do less of that.

We will certainly challenge ourselves more on travel, because there is definitely an efficiency increase when you do less of that.”

Andrea van Duijse | Global HR Manager of Group Mergers, Acquisitions and Divestments, Shell

I think maybe this is particular to my location, but we may challenge ourselves a little bit more about being in a meeting room when you have just a one-on-one meeting. Going for a walk with someone outside is allowed in the Netherlands, so we have been doing walking meetings. It is amazing how efficient that is: you get to the point much faster, and the fact you are both walking in the same direction is helpful as well.

GL: Thank you all for your insights. Andrea, your question to other business leaders is such an important one: how are you all adapting and adopting new ways of working, going forward? Perhaps that’s a question to our readers, and a future discussion we can have.

Thank you for reading. If you would like to discuss any of the themes in this article in more detail, please contact your usual Willis Towers Watson representative or Gabe Langerak.

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Senior Director – Mergers & Acquisitions, Western Europe

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