international mergers and acquisitions - what to do when you find yourself as key role

International Mergers and Acquisitions - What To Do When You Find Yourself as Key Role

Katie Herta & Silvia KaiserWE’12 Houston, TX

Agenda

Biography of presentersFacts and Figures on International Mergers & Acquisitions (M&As)What do people think of when they hear the word Merger and Acquisition?Key Success Criteria for an international M&AOur Story: Modipuram, India

Biography of Katie Herta

Graduated 2005 with B.S.E. from University of Michigan – Ann ArborStarted in July 2005 at Continental Reifen Deutschland GmbH in the Conti Explore ProgramMarch 2006 – March 2009: Product Development Engineer April 2009 – present: Group Leader in Commercial Tire TechnologyCurrently serving as SWE International Member coordinator; previously served as International SenatorM&A experience: worked within a management team on the topic in general and additionally a key member of the Modipuram Integration team

Biography of Silvia Kaiser

Graduated 1992 with Diploma in Mechanical Engineering from University Hannover (FH)Started in 1992 at Continental Reifen Deutschland GmbH in the Passcar Tire Development1996 –2003: Groupleader in PLT and Extended Mobility Systems2004 – present: Projectleader in PLT and CVTCurrently responsible for the integration of R&D related tasks and organization of Conti IndiaM&A experience: worked with development centers of Uniroyal, Semperit and General Tire, business partners for Extended Mobility Systems and leads Modipuram Integration team

What do you think of when you hear the word M&A?

Same processes, standards

Comm

on Goals

Synergies

between

companies

Insecurity

Mixed Working

Teams

Continental - Internal survey November 2010

Facts and Figures on International M&As

Why do an international M&A?Growth

How successful are international M&As?Not very..failure rate of between 70-90%1

Why are international M&As so unsuccessful?Many reasonsPaid too muchInsufficient fitStrong cultural differences….

The Big Idea The New M&A Playbook March 2011 Harvard Business Review Clayton M. Christensen,Richard Alton, Curtis Rising,and Andrew Waldeck

What are the key success criteria for a good International M&A?


Dos & Do Nots of an integration

Personal relationships/ trust/ respect

Integration rather than a takeover/ cooperation & commitment

Common/ same/ agreed goals/ visions

Clear/ open/ consistent communication/ telling the truth

Same processes & standards

Hidden agendas/ lack of trustDominance over the “little

guy”/ arrogance (both technical & work culture)

Lack of/ unclear communication, goals, timing

Destructive behavior (political games, protection, hiding facts)

Doing nothing/ letting things run as it always was/ no same processes


Our Story: Modipuram, India


• Modi Tires was a partner for many years but closed quite suddenly in early ‘00s

• After reopening, Continental sought to buy the company almost immediately

• The Indian market runs on an older tire technology called diagonal tires and the knowledge is only available with few specialists in different global locations has unfortunately been lost/reduced in our company

• 3 umbrella projects were created to aid in the integration AND market entry India and we were a subproject of one of them

• Main focus of our project was to deal with the current running products and bring them onto Continental standards


• Challenges• Lost technology• Cultural differences• Many different stakeholders and involved

people

• Opportunities• Indian counterparts were very knowledgeable

and motivated to get things done right• Indian hospitality is wonderful, you always

feel like you are at home

First time meeting

• What is my part? Positioning yourself:• Take care for your area of responsibility: in this case project leader of

a common technical project

• Expectation of the other company: you are able to present the background and task of this project

• Spend time on your personal introduction: education and business background information ensures your status and knowledge

• Respect the expectations of your business partner:• Our Indian partners had international business experience on top

management level, not familiar with this kind of project management but highly motivated to give input

• TIP: get a moderator for project start ups that has lead meetings with asian participants successfully

First time meeting

• Stay calm, practice your patience• When the senior appears and his managers discuss ten minutes

about his new ring

• When your partners switch to native language – afterwards they will inform you about their common opinion

Working together

• Set-up a project:• Win over your team with the input of their managers

• Explain how their managers do a follow-up of the results

• A breakdown of the different work steps according to timeline helps

• Keep in touch, involve, explain and run a step-after-step strategy

• continuous follow-up, stay calm and never give-up (… even if the situation appears hopeless)But: think about another way when they tell you it may be difficult (=impossible!)

• Give extra time on items as your counterparts are getting asked by many people to do many things and they need to learn our process and standards at the same time

Working together

• Project reporting• May be separate for local and external steering team

• The local boss is included in any reporting of your team member

• ensure that the way of working considers your requirements by discussing one step after the other with your contact

• convincing your contacts superior (and other seniors) makes the life of your contact easier

Skills to be successful

• Take the chance to read the acquisition contract – especially when it is not a take-over: it should give a clear answer on the parties responsibilities and tasks

give feedback to your legal department if you find something in contradiction to your experience or it is missed: they may not know everything

• You are the represent of your company independent to your task: be prepared to be the interface for other departments/topics. If you do not know the right contact, take the task with you and follow-up when you are back

• Be flexible: your schedule should not be too tough. Additional tasks will wait for you and input from a central expert is often appreciated

• Define your key contact in India and support him getting results

Skills to be successful - communication

• From the beginning: try to be in contact with your internal colleagues: the better the overview, the easier to build relationship between the tasks and to get a consolidated approach

Streamline communication: requests should be clear and with one voice from central

• Read between the lines – do not expect clear communication

• Keep your patience: expect the unexpected and do not answer in clear words if you need time to think about (but continue talking)

• No result after a full day of extensive discussions? use the time between the dishes in the evening because even

this is business!

Cultural Shock India• Use the advantage to be a foreigner• Seniority is an important part of daily live• Education (e.g. university degree) is main criteria to be respected• Take your business cards with you• Handshake is initiated by you - but you may also handsign „Namaste“ (equal

politeness)• Time is relative in India• Food: is usually put in the middle of the desk and you share• Do not take: ice, open water bottle, fresh fruits, ….• Quality of facilities are different from place to place• Clothes: trousers are welcome, normal business outfit is fine,

But: no shoes inside private houses!• Security: car and bag checks at bigger hotels are standard• Take care with your wishes: they will try to realize them• Visa required … and a lot of paper to fill while travelling into or leaving India• Be prepared to talk about your personal life. If you are not married, why not

and if you are married but no kids, when are the kids coming

Thank YouDankeschön

Any questions?