【正文】 s Value Growth Following a Merger Top performing mergers create significant shareholder value Value growth 3% 8% 12% 27% 21% 16% 3% Underperformance pared to industry average Overperformance pared to industry average 100% 60% 30% 30% 60% 150% 15% 15% 0% Average: % % % ? TopPerforming Mergers 10% . Kearney 4/1375C/Merger Integration 1083 19 _Macros 9 Business Integration issues require ―usual‖ management decisions while four main factors add another level of considerable plexity… Scope ? High number of decisions to be made in all operational and functional areas ? Dozens of projects/initiatives and risks to be managed Time pressure ? All stakeholders expect rapid execution (shareholders, employees, management, regulation mittees, government,…) ? Decisions need to be made without delay Simultaneity ? Coexistence of strategic, tactic and operational decisions ? Strong interdependence of the decisions ? Short term and strategic decisions may seem inpatible Human ponent ? High number of people potentially involved (operational, functional and executive people) ? Risk of cultural mismatch ? Scarce resources to bridge between merged panies Usual Management decisions Strategy IPO ? Define the scope of bined entity ? Confirm each country’s scope of activity for mobiles ? Design strategy leveraging on broader global presence ? Define financial and operational targets as well as timing of expected benefits ? Prepare the IPO Organisation ? Choose the best anisational model at the European management level ? Identify the central/local functions evolution schedule ? Define anisational charts and management nomination ? Define key decision processes (mittees, procedures, …) Infrastructure ? Reduce total cost of external purchases through best price evaluation volume concentration, petitive bidding ? Share best practices ? … Support functions ? Rationalise shared supports ( ? Align and select Information Systems for the integration ? Align processes and share best practices Communication ? Define external munication strategy ? Define internal munication strategy ? Select munication rules and procedures ? Choose media (intra, documents, speeches…) Integration mgnt ? Integrate overall planning and milestones ? Detail planning by topic and country… ? Manage transition phase ? Track and execute financial synergies ? Manage risks . Kearney 4/1375C/Merger Integration 1083 19 _Macros 10 … explaining why only few mergers and acquisitions succeed fully Note: (1) Shareholder returns from buyer divided by shareholder returns (industry average) after the merger Sources : . Kearney analysis, Global PMI Survey, 1998 。 . Kearney Analysis 2023 Retailers % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % Recreation Chemicals Metal Producers Paper Transportation Diversified Drugs, Cosmetics Health Care Utilities Automotive Printing and Publishing Electronics Financial Beverages Metal Products Manufacture Food Tobacco Machinery Equipment Electrical Miscellaneous Oil, Gas, Coal Related Services Construction Textiles Aerospace Industry Specific Ranges of Value Creation(1) . Kearney 4/1375C/Merger Integration 1083 19 _Macros 12 Once the deal is closed, the principal problems relate almost entirely to failures in merger management, rather than to the underlying strategic rationale Problems Identified in Merger Integration 21%26%26%32%37%37%47%47%58%Undermunication Financial/synergy Expectations Unrealistic/Unclear New Org. Structure With Too Many Compromises ―Master Plan‖ Missing Missing Momentum Missing Top Management Commitment Unclear Strategic Concept Missing Pace of Project IT Issues Addressed Too Late Source: . Kearney’s Global Merger Integration Survey 1998 Percent of Respondents . Kearney 4/1375C/Merger Integration 1083 19 _Macros 13 To manage inherent risks, ―critical success factors‖ can be distilled from successful largescale mergers to guide value creation Critical Success Factors from LargeScale Mergers Source: . Kearney Merger Integration ? Create a sense of urgency and reduce uncertainty through clear event milestones, and move quickly ? Select toplevel leadership quickly and fairly。98 Value Capture of Top Performers Over Time 15% Year 1 Year 2 Cumulative Value Capture After Two Years 85% Time Closing the Deal 1 2 3 4 5 6 7 8 9 10 10 8 6 4 2 0 2 4 6 Value Capture/Loss ($ MM) Year in Which Synergies Are Realized Timing of Synergy Realization Is Also Critical Source: Marl L Sirower : The Synergy Trap. Calculated based on a $10MM acquisition premium, representing 50% of market value In our experience, the most critical element in achieving targeted benefits is speed . Kearney 4/1375C/Merger Integration 1083 19 _Macros 15 Proposed Overall Approach . Kearney 4/1375C/Merger Integration 1083 19 _Macros 16 . Kearney has a flexible merger integration framework with a prehensive toolkit to support planning and implementation throughout the merger process to ensure value capture . Kearney’s Merger Integration Framework Develop Strategy Establish Structure and Plan ?Merger/Acquisition options ?Create/articulate/validate — Markets/customers — Competition — Resources — Sources of value ?Understan