M&A communications planning
In October we ran a masterclass in M&A communications. Merger and acquisitions communications planning is challenging because a merger is always a fast-breaking story. Rumours will start to fly as soon as people pick up the scent that a merger is bubbling. Everybody will have an opinion, and all the rules of gossip prevail. In this tense environment, it is easy for messages to be misinterpreted, twisted, or exaggerated. Therefore communication planning requires much more thought in a merger than it does during more stable, less stressful circumstances.
The event focus
In 2016, two significant mergers played out. Ball Corporation merged with Rexam becoming the largest manufacturer of beverage cans in the world, and AB InBev merged with SAB Miller, becoming the world’s first truly global brewer.
Rexam and Ball Corporation resulted in a £5bn merger, making well over half of the world’s annual 300bn cans, and SAB Miller and AB InBev resulted in a £105bn merger and the largest ever transaction in UK history.
Mark Bunker, former Group Director of Communications at Rexam, alongside Duncan Gordon, former Global Director of Communications at AB Inbev and Justine Stevenson, former Head of Internal Communication at SAB Miller, explored these M&A communications challenges and shared with us their key learnings.
Getting to grips with the process and potential timescales is key. Here’s a guideline of the process:
- Approach and offer
- Board agreement: offer acceptance
- Regulatory pre-conditions (potential divestments)
- Convergence planning: day one/first 100 days focus
- Shareholder vote
- Change of control
- Integration and synergy realisation
You’ll be managing a multitude of stakeholders for which you have to be prepared. Here’s a list of the key people likely to be involved: employees; company leadership – CEO & CFO; the board; the takeover panel; internal deal team; lawyers; bankers; media; HR function; employee representative bodies; global communications functions.
External and internal communication strategy
Aligning both external and internal communications is crucial and getting the absolute best from your teams from start to finish will be very important, as will the following:
- Being prepared and reacting quickly to external factors
- Internal and external communications need to be aligned with the merger roadmap
- Maintaining the focus on the business and putting your employees first
- Maintaining focus on business performance, helping to manage uncertainty and preparing people for the journey ahead through excellent employee engagement
- Establishing an Internal communications infrastructure and capability that gathers regular, detailed insights into sentiment and minimises risk and disruption, in conjunction with HR
- Deploying internal communication channels and content that effectively supports both global and corporate internal communications
- Supporting and equipping leaders to lead positively through uncertainty and deliver excellent performance
- Assessing the culture of both companies is crucial and not coming to any early conclusions on potential similarities. The road to cultural happiness is a long one and it should start long before the merger completes
- The importance of listening to employees came as one of the most important learnings, measuring engagement, supporting leaders to lead and deploying the right channel mix for key audiences
Gloria Lombardi, founder of Marginalia, future of work magazine says: “Although decisions are being made at a senior level, it can’t all be a top-down communication process. Employees should have opportunities to voice concerns and ask questions without fear. Yet, leaders at every level may be resistant and uncomfortable communicating at a time when details can change.”
Keeping productivity high is one of the biggest struggles during a merger. It all comes back to communications in order to lessen the impact of disengagement and low productivity and organisations need to be transparent and upfront.
Attracting, engaging and retaining talent during a merger is a very evident challenge too. This has always been the case, but has the risk of being further amplified through social media channels and platforms like Glassdoor, where dissatisfaction is shared, which in turn does also impact retention and attrition.
You have to be open to the possibility of rumours, which can easily be leaked to external parties. If you don’t involve your employees then they will more than likely reach their own conclusions about why things are taking place and what the future could look like. Fake news that reaches any key stakeholders, or even competitors, can be damaging.
If you are interested in speaking at one of our events, or would like to attend an event in the future then please do get in touch at firstname.lastname@example.org.
To discuss any of the issues raised in this blog, please contact Sara Tehrani.