Successful Merger Integration
How BCG Helps Maximize the Value from a Deal

This brochure, one of a series of eight describing BCG’s capabilities
in deal transaction and integration, encourages acquirers to startworking on integration early by setting clear objectives and plans.
Post-merger integration is, of course, a time of great uncertainty, but
acquirers can reduce that uncertainty by moving early and decisively.
Leaders must provide strong direction by laying out the phases of theintegration and the structure of the integration teams, with clear roles
and responsibilities. Clean teams and other advance work can help
with capturing value soon after the close, while talent management
and consistent, pervasive communications will reassure employees,
customers, and vendors. Culture assessments can identify potential
areas of conflict and inform focused interventions to address them.
While acknowledging that every acquisition is different, the brochureexplains the main areas to work on in achieving a successful integration.
Time is money, yet success comes not from speed per se, but from early
efforts to envision and implement a new organization that realizes thestrategic goals of the deal.

A Story of Post-Merger
Integration Done Right

In under three years, BCG helped to merge two energy
players into a European downstream giant, withregulatory approvals planned for and smoothed and all
remedies managed.

It was a perfect trade. With restructuring inenergy markets transforming the industry, E.ON
and RWE were going in opposite directions. E.ON
aimed to become Europe’s largest downstream
electricity provider, while fossil fuel-dependent
RWE was shifting toward renewable power
generation. E.ON’s leadership approached theircounterparts at RWE with a bold proposal: split
your innogy subsidiary, sell us the grid and retailelements, and keep the renewables business.
In return, E.ON would give RWE its renewables
generation as well as €1.5 billion in cash. RWE
accepted the swap in early 2018.
The post-merger execution was extremelycomplex as it included a carve-out, a spin-off,and the split of a centralized parent structure atinnogy.

Creative swap of assets, shares, and cash2018
adj. EBITDA €B

2018
adj. EBITDA €B

2018
adj. EBITDA €B

Renewables

0.8

Renewables

0.6

Lignite & Nuclear 0.4

Grid

2.8

Grid & Infrastructure 2.9

European Power 0.3

Retail

0.7

Retail0.8

Supply & Trading 0.2

76.8% innogy to E.ON
+ €1.5B Cash

Becoming a
producer: power
generation & trading

Becoming adownstream player:owning grid & retail

BOSTON CONSULTING GROUP

16.7% share

01The operations to be combined were of nearly
equal size. Although both were based in Germany,
they had sales in 15 European countries. The
assets to be transferred had total revenues of €43billion, making for a massive deal that dwarfed
other recent combinations in utilities. More than
70,000 employees of both companies faced theuncertainty that comes with a transaction ofthis size. In addition, innogy had some minority
shareholders separate from RWE. Managing allof this required finesse, courage, creativity, andperseverance from both parties.
For E.ON, the integration had two closing days.
Day 1 came in September 2019 after the EU
antitrust authorities approved the deal and E.ON
gained a controlling share of innogy. Day 2, inJune 2020, brought innogy fully inside after E.ON
bought all remaining shares. The integration
proceeded within the expected time while
overcoming uncertainties due to both Brexit andthe coronavirus pandemic.
BCG was involved from the deal’s inception. To
achieve synergies in this complex deal, E.ON
designed every aspect of the merger in advance.
An activist integration management office (IMO)
kept the focus on priority sources of value. It
uncovered conflicts and refused to accept easy02 							but unsustainable fixes. Additionally, it managed
stakeholders and communication, including
the creation of a compelling deal story. BCG’sclean team created full transparency over costs,
developed a synergy baseline, and acted as adata broker between E.ON and innogy.
BCG supported E.ON's integration leadershipwith rigorous and diligent steering to theintegration teams. Its consultants structured andmanaged the overall program, while supporting
decisions on the new company’s operating
model and organization structure. With thecommunicated range of €700-€800 million insynergies on track, the capital markets valued
the new E.ON at a higher level. In addition to
the main operations, BCG supported integration
teams in several complex areas, including retail,
IT/digital, and energy economics.
The discipline paid off. Over the three-year
marathon—relatively short for such a large
deal—two quite different companies were
carefully merged. EU approval went smoothly,with all remedies successfully managed. The
new E.ON was also crisis-robust: More than 80%
of its assets were regulated, protecting it frommarket fluctuations.

SUCCESSFUL MERGER INTEGRATION

Three-year integration marathon delivered on time and in full
Design phase~3 Months

Capitalmarketday
Dealannouncement

Pre-closure planning phase~18 Months

High-level
FOM1
definedCooperationagreement

Synergyambitionset

Takeoveroffer

Day 1: Dealapproved &new innogy
Boardnominated

N-1
Executives
announced

Successful
PTO2

2018

Interimoperatingmodel inplace

Day 1 &
integration
ready

Programup &running

Implementation phase>15 Months

2019

Day 2: MSO3
executed, fullownership &control achieved
Migration
into FOM1
Assets& FTE
transfers
ready

2020+

1. FOM = Future operating model  2. PTO = Public takeover offer  3. MSO = Merger squeeze-out
Transaction events

Integration events

Program structure — The BCG team helped the client manage the merger across all
aspects of the program
E.ON SE Board
Integration Council

innogy SE Board

Integration Lead

Codetermination

Integration Management Oﬃce
Planning & Steering

Synergies

Legal Implementation

Clean Team

Communications

People & Organization

Special Topics

Integration Teams• Steering & FOM• Hungary• Energy Economics• German Retail

Renew. Carve-Out

Transaction• IT/Digital

BCG supported
Note: SE Board = senior executive board

BOSTON CONSULTING GROUP

03

BCG Has Navigated PostMerger Integrations for Many
Clients. Imagine What We
Could Do for You
BCG brings best-in-class capabilities, with a customizable,
rigorous,andprovenapproachtoPMIbasedonthehundredsof integrations we have supported. We understand thecritical issues to get right, and tailor our approach to ensure
focus on the sources of value and risk for each integration.

We bring senior teams knowledgeable in both
our clients’ industries and PMI. They combinea deep understanding of the business and theirstrategic opportunities with M&A experience inall geographies and businesses.

close so that they get most of the integration
benefits within the first year. Integrations
that we supported have yielded an average of
125% of planned revenue synergies, or 115% ofplanned cost synergies. PMIs with our support
generated 9% higher total shareholder returns
than those without.

BCG has a track record of delivering higher value,
faster, with fewer disruptions to our clients’ dayto-day business. We push for planning pre-Indexed synergies

Indexed shareholder returns relative to market
115

Revenuesynergies

25%

BCG assisted
Average merger

110
105

+9%

Ø

100

15%

Cost
synergies

95

0

2

4

6

8

10

12

14

16

18

20

22

24

Months after deal close

Planned

Achieved

04 									SUCCESSFUL MERGER INTEGRATIONWe bring a sophisticated and state-of-theart suite of integration tools and digital
capabilities underpinned by an agile way ofworking, including such proprietary tools as our
Synergy Database, SynergyBuilder by BCG™,
OrgBuilder, Hub by BCG, Culture Survey, andKey by BCG. We provide specific tools foradvanced data analytics where relevant.
BCG offers end-to-end support to transactions,
including growth strategy and due diligence.
We ensure that the full deal cycle is connected
in terms of focus areas, assumptions, synergy
estimates, and leadership to assure that ourclients achieve their strategic objectives.
Our senior consultants spend significant timecollaborating with client teams, which builds
out the latter's capabilities and enables them tocontinue capturing value  after the deal closes.

AREAS OF PMI SUCCESS
Acquisitions are often enormous undertakingsthat represent major strategic bets. Successdepends on quickly turning these high-levelcommitments into practical results on the
ground. But bringing together two separateorganizations is a fraught procedure. The
two companies may be quite different, both
culturally and operationally. Employees may
have concerns about what the acquisitionmeans for their job or career.
It’s easy to get lost in resolving the myriad
conflicts and uncertainties that arise from
integration. That’s why BCG recommends
three areas of focus: setting clear objectives
and plans, capturing the value, and buildingout a coherent joint organization to support
the strategy. For each of these areas, we havedefined four imperatives for success.
We will review each area in the next sections of
this brochure.

BOSTON CONSULTING GROUP

05

Three areas of focus and 12 imperatives for integration success

1

2

3

Set the direction

Capture the value

Build the organization

Define at the start the basic
objectives of the integration

Emphasize speed; use theperiod before closing to startdesigning the future company
and prepare to capture value

Design the future operating
model early on; it may differ
from the Day 1 structure

Aggressively pursue
synergies according to theintegration’s objectives

Manage talent by selecting,retaining, and developing thebest people

Organize integration teams
around the drivers of value
and the target operating
model, and appoint leadersfrom both companies

Keep the current businessstrong by including existingcustomers in the integration
process

Rigorously manage cultural
integration and change
management

Insist on senior leadershipthat is committed, credible,and highly visible

Decide on IT for the
integrated company early andexplicitlyCommunicate, communicate,communicate; better to havetoo much than too little

Manage the integration
as a discrete programwith a rigorous approach,independent of size06 									SUCCESSFUL MERGER INTEGRATIONReal Deals, Real Results:
Provided End-to-End Support
for AbbVie’s Acquisition andIntegration of AllerganWith its blockbuster drug Humira losing patent
protection in a few years, pharmaceutical giant
AbbVie needed to diversify its drug portfolio.
Besides conventional treatments, it was looking
for products in high-growth, innovation-driven,
price-stable categories.
After a broad search of opportunities, it focusedon Allergan, another multi-line pharmaceuticalcompany with a specialty in medical aesthetics.
The Allergan board accepted the offer at a priceof $63 billion, with the deal announced on June25, 2019.
To succeed, the deal needed to give AbbVie
substantial cost savings, estimated at $2 billion
by year three, and then sustained revenue
growth after Humira lost exclusivity in the
United States in 2023. AbbVie’s profits in the
short term would pay off most of the debt fromthe deal. Besides rejuvenating its portfolio,
AbbVie also expected to boost sales of Allergan
products with its commercial expertise andinternational infrastructure.
To achieve those ambitious goals, BCG
helped AbbVie carry out extensive pre-close
integration planning. It actively supported theintegration management office, supported
the integration teams, and tracked progress
toward integration goals.

BOSTON CONSULTING GROUPThe priority was to pursue critical sourcesof value, especially Allergan’s strengths inaesthetics. To help retain talented employees
from both organizations, the integration teams
decided on many future positions before theclose, including an Allergan executive on the
AbbVie senior team.
AbbVie didn’t simply fold Allergan into its
existing structure. The latter’s aesthetics
business became the centerpiece of a new
global business unit. That led to decisions on
which support functions to place in the unit, andwhich would come from AbbVie headquarters.
On the cost side, the integration teams went
deep into the details to achieve savings throughconsolidation of infrastructure and rationalizingof investments, particularly in the R&D pipeline.
BCG also helped the teams with change
management, coordinating wide-ranging plans
to help teams across the enterprise adapt to
new processes and ways of working.
The coronavirus pandemic hit before theclose on May 8, 2020, less than a year after
the deal’s announcement. But with intensified
communication
andcollaboration,
theintegration work stayed on track, with a happily
uneventful close, smooth post-close operations,and continued strong business performance.

07

AREA

1
Set the Direction

Integrating two separate organizations is a highly
complex process. Some challenges must be overcome
early, while others can wait or be avoided altogether.
People at all levels need clear direction on where andhow to proceed. Without priorities set from the start,
the integration will get bogged down in lower-value
details.
From the beginning, the acquirer’s leaders need
to be clear on the strategic logic of the deal.
Why are we going to all the trouble and risk ofacquiring this company? Is it for cost savings,
scale, opportunities for joint efforts, or somethingelse? The answer to this initial question leads tosubsequent questions:• How fast must we move to achieve theexpected benefits?
• Will we largely absorb the acquired firm, or
take the best aspects from each company?
• Is this a straight integration, or an opportunity
to transform the overall business?
• For business processes and IT systems, will
we rely mainly on one company’s infrastructure, or select the best from both?
• Which parts of the two organizations will wefully integrate and which will we leave alone,and for how long?

With answers to these questions, leaders
can move quickly to three key decisions forthe strategic and economic goals, the value
proposition for customers and employees, andthe expectations about roles, decision rights,
and processes.
Having established the overall direction, theacquirer must set up the integration as adiscretely managed program. It needs committed
resources, largely separate from day-to-day
operations—PMI is too important for managers
to do on the side. That means an activist IMO
overseeing several teams, supported by tools toimprove the efficiency and effectiveness of theplanning process and to focus the integration
on areas of highest value and risk. Most teams
will plan the integration for specific areas, suchas business units, regionals, and headquarters’
functions. Other teams will work on overall
platforms, such as calculations for synergies,
talent management, and change management.
And still others will handle special issues, suchas antitrust, brands, and customer tracking.

08 									SUCCESSFUL MERGER INTEGRATIONHow BCG teams help clients through the phases of an integration

Phase I

Integrate thebusiness

Phase II

Set UpDesign and Plan

2–6 weeks

3–4 months or longer due toregulatory approvals

Manage people
transition

Manage culture
and change

Communicate

Implement
12–24 months• Define integration
principles• Plan for Day 1 continuity
and beyond• Launch the integration
management office• Develop and rigor test
implementation roadmaps• Execute the integration,
gain quick wins, andtransition theimplementation to the line

• Define synergy andone-time cost estimates• Track implementation andsynergy capture• Define teams andprocesses

Deliver financial
impactPhase III

• Create financial andhead-count baselines• Resolve/escalate
roadblocks• Define post-close tracking andgovernance• Define the overall operating• Define target operating model
model for the future company • Design and staff at least the• Identify the Level 1
top two levels of the organizaexecutives
tion by the close• Launch talent retention
programs• Define post-close organization
design and the talent selection
processes• Engage senior leaders as
advocates• Build change management
actions into integration activities• Begin two-way communication with employees• Define the target culture• Celebrate the close of the deal
and welcome people to the
combined organization• Design the remaining organization and staff all positions• Enable people manager to leadthrough the integration• Launch the defined culture andbegin culture interventions• Build the culture baseline• Develop the culture roadmap• Support internal and external
stakeholders through changes• Define and launch stakeholder communication plans• Finalize the Day 1 communications plan

• Communicate, communicate,communicate

The integration program itself has three phases.
Set Up is about launching the IMO; defining the
program governance; gathering financial, headcount, and culture baselines; defining the toplevel operating model for the combined entity;
and launching initial communications efforts.
Design and Plan involves preparing for a seamless
Day 1, detailing synergy plans and paths as wellas the target operating model, defining change
management actions and cultural integration,and setting communication plans. The final
phase, Implement, is all about executing the
integration, including tracking milestones andsynergy capture, while supporting leaders andinternal and external stakeholders through thetransition to the combined end state.

BOSTON CONSULTING GROUP

While the IMO manages the integration, it
needs active and visible leadership support fromsenior executives. They need to engage on thesteering committee and integration teams, andcontinuously articulate and reinforce the deal’s
strategic logic. Visible leadership is essential
because the organization’s lower levels will
mirror what senior management does, not what
it says. Leaders should also manage the essentialbalancing act of supporting the integration
without putting the ongoing business at risk.

09

AREA

2
Capture the Value

In mergers, more often than not, time is money. The
acquirer typically puts out a great deal of cash up front(or takes on debt). The faster it captures value from theintegration, the higher the return on this investment.
Speed also stabilizes the new organization as it reduces
uncertainty.

But speed in this case isn’t about working
faster; it’s about careful deliberation and themaking of decisions before the close. Whenestablished from the beginning, clarity andaccountability can reduce delays and expedite
the most important work. Advance planning will
also ensure business continuity after the close,
including reassuring customers worried about
service levels.
Clean teams are a key element of the advancework, giving acquirers an early blueprint for
integration opportunities based on analyses ofdata that due to antitrust reasons can’t be freely
shared between both companies. This work
enables companies to hit the ground runningand capture value on Day 1. (See our The Clean
Team Advantage Brochure.)

In both pre- and post-close work, the integration
teams need disciplined attention to synergies.
That means an iterative process of the steeringcommittee setting stretch targets and tracking
results throughout the PMI. Our SynergyBuilder
by BCG™ tool supports this process, including
defining financial baselines, setting targets,
defining initiatives, and finalizing synergy plansthat are ready for post-close execution. Cost
synergies are usually easier to quantify andachieve; but for many acquisitions, revenue
synergies matter more in the long run.

10 									SUCCESSFUL MERGER INTEGRATION

Synergy target setting, planning, and capture is an iterative process

Steering
Committee sets
top-down targets

Steering
Committee

IMO

Steering Committee
reviews bottom-up
plans and makeschanges as needed

IMO rigor tests
synergy initiatives
and works withintegration teams
to revise as needed

Integration
Teams

Integration teams
develop bottom-up
integration plans toachieve synergies

Steering Committee
approves final plans
and launches
synergy initiatives

IMO executes andtracks progress against
milestones, KPIs, andimpacts

Line Management signs
off on synergy targets
and integrates theminto budget

While moving on the synergies, integration
managers must look out for the existing
business. Customers may be nervous about theacquisition, fearing disruption or higher prices,
especially if they buy from both of the combining
firms. Competitors may take advantage of theuncertainty to try to pick them off. In addition
to salespeople approaching their accounts,
executives need to make the effort to reassure
customers directly. They can even solicit input
from the larger accounts on select integration
decisions.

Information technology is a priority
area, as the IT function needs to not only
integrate itself, but also enable otherfunctions in achieving their synergies.
This often requires a large investment up
front, but one that pays off over time. Most

acquirers will want to go with simplicity
rather than developing the perfect system.
They will select the IT stack of one of the twocompanies as the basis, and adopt selectapplications from the other company that
truly add value.

BOSTON CONSULTING GROUP

11

Real Deals, Real Results:
BCG Helped Inspire Brands Build
Differentiated Digital Capabilities
In late 2018, Inspire Brands, a multibrand restaurant group,
embraced digital disruption and sought a competitive
advantage in digital and analytics. The acquisition of
Buffalo Wild Wings earlier that year was the impetus for thiseffort. During the consecutive post-merger integrations of
SONIC Drive-In and Jimmy John’s, Inspire partnered with
BCG to build differentiated data and analytics capabilities,
leveraging the scale of their multibrand portfolio to drivecompetitive advantage.

Getting there required substantial work acrossthe legacy organizations. Each brand had
different technology assets and infrastructure,
the processes and ownership of new digitalsolutions weren’t consistent, and there were
gaps in the technology stack. BCG helped design
a new operating model with centralized sharedservices for digital and data infrastructure, aloyalty center of expertise, and brand-specificmarketing functions. The approach was usecase driven and focused on capturing value
in a series of sprints. A build-operate-transfer
model ensured joint ownership and a successful
handover to the Inspire organization.

Each brand in Inspire’s portfolio now uses
the digital platform to improve customer
experiences,brand
loyalty,store-level
operations, and overall decisions. Substantial
value has been delivered already, including a
top-line gain from improved demand forecastingand personalized marketing.

12 							SUCCESSFUL MERGER INTEGRATIONThe new digital and data platform is adifferentiating asset for Inspire. It helped
unlock the ability to acquire Dunkin’ Brands in
2020, the restaurant industry’s second-largest
transaction, making Inspire the second-largest
restaurant company in the United States.

AREA

3
Build theOrganization

The third area of focus during an integration isbringing the two organizations together. Thatstarts with devising the operating model forthe combined company. Any new structure cangenerate conflict, but a clear upfront decision onhierarchies will reduce confusion and establish
the all-important accountabilities for achieving
synergies.
Unless the deal is a merger of equals, theoperating model typically follows the acquirer’s
structure. Acquirers can add elements of thetarget’s structure where relevant to facilitate
operations, especially growth areas. Companies
often design and staff the first two organizational
layers below the CEO before the close. But insome integrations, our clients have designed thefull organization before close; in others, only the
direct reports to the CEO. It all depends on thecircumstances of the deal and the time between
deal announcement and close. Our proprietary
OrgBuilder tool supports the end-to-end
process for organization design and selection,and ensures all people in the organization areaccounted for through a single-source-of-truth
database.
As with customers, acquirers must make sure toretain key personnel. Inevitable ambiguities willcause employees to wonder if they have a futurein the new organization, especially if their directboss is leaving. Competitors will make a special
effort to lure away the more talented people.

Example approach to organization design and staffing in a PMITimingProcess

2–3 months
before close

Define operating model and set
organizational guidelines

2 months
before close

CEO/division head appoints direct reports

1 monthbefore close

L2s define their organizations

L3s define their teams
Post-close
L4s define their teams

BOSTON CONSULTING GROUP

Smaller units(e.g., legal) will
be done in asingle step

Deal close

13

The key here, as elsewhere, is to focus on thegreatest payoff. Integration managers can divide
employees into three groups:
The first is critical talent, the high performers
you want in your organization even if you don’tknow their exact position. All of these should
be considered for key roles in the integration
program.
The second is the specialist talent, such as
IT professionals, whose skills are essential toachieving synergies in the integration, and whoshould be incentivized with short-term retention
bonuses if perceived to be at risk of leaving.
The third comprises all other employees, who
still need to be treated with respect. Money isan important driver of retention, but not the only
one. Seeing a future role in the organization,
being inspired by the integration’s strategic
vision, and being treated with respect are drivers
that should not be overlooked.

While hitting synergy targets is essential, PMI
is much more than a numbers game. A merger
must reknit the human fabric of the organization
amid ongoing uncertainty. Integrating twoorganizational cultures is often more difficult
than devising the new structure or selecting theleadership—and it will matter more for longterm success.
The new company’s culture can be quite close
to the acquirer’s, a hybrid of the two firms, orsomething altogether different. But it doesn’t
emerge on its own. To get the desired outcome,integration leaders need to set the tone byarticulating the end-state culture, modelingthe key behaviors of that culture, and targetinginterventions toward that culture for all
employees. A structured change management
program is critical to support this process, andshould cover both the target and acquirer’sorganizations.

14 									SUCCESSFUL MERGER INTEGRATION

Assessing the similarities and differences of the two company cultures

Decisions are made at the top and cascaded down

Decision-making is delegated into the organization

Bias isatfor
in decision-making
Decisions are madethespeed
top andcascaded downBiasfor consensus
in intodecision-making
Decision-making
is building
delegatedthe organization

Decisions are based
business
Bias onis forspeed judgment/intuition
in decision-making

Decisionsare basedbuilding
on detailed
analysisBiasfor consensus
in decision-making

Experimentationis encouraged
Decisions are based on
business judgment/intuition

Risk is tightly
controlled
Decisionsare based
on detailed analysis

Plans are implemented
quickly
Experimentationis encouraged

Ensurethat planis robust before implementing
Risk is tightly
controlled

Entrepreneurial
orientation
is expected
Plans areimplemented
quicklyTopmanagement
strongguidance
Ensurethat plan isgives
robustbeforeimplementing

People tend to maintaintheisstatusquo
Entrepreneurial
orientation
expected

Peopleare flexiblegives
and strong
open toguidancechangeTop management

People are constantly
finding
new ways
do things
People tend
to maintain
thetostatusquo

People areworkflexible
accordingwell-definedPeopleandto
open
to changeroutines

Objectives
are set bya small
group
Peopleare constantly
finding
newwaysoftoindividuals
do things

Objectives
delegated
formal,set processes
Peopleworkareaccordingto throughwell-definedroutines

Financialare most
important
Objectives are
set by metrics
a small groupof individuals

Operational
metrics
are most
important
Objectives aredelegatedthrough
formal, set processes

Customer
focus
decisions
Financial
metrics
are drives
most important

Product
excellence
decisionsOperational
metricsdrives
are most
important

A rules-based approach
useddrives
for compliance
Customerisfocus
decisionsA
principles-basedis used for compliance
Product
excellenceapproach
drives decisions

Communication
open
informalA rules-based
approach is is
used
forandcompliance

Communication
is formal
andisstructuredA
principles-based
approachused for complianceDifferences in culture
exist acrossis divisions/functions
Communication
open and informal

Uniform culture isexistsacrossCommunication
formaland divisions/functions
structured

Differences in culture exist across divisions/functions

Uniform culture exists across divisions/functions

Target self-assessment

Acquirer self-assessment

Acquirer self-assessment
Largest areas of divergence
Target self-assessment
Largest areas of divergence

Finally, communication is not a nice add-on to
the integration, but a crucial driver. Internally,
it’s central to reducing anxiety, building
trust, boosting motivation, and managing
expectations. Externally, it makes customers,
suppliers, investors, and regulators more likely tosupport, or at least not block, the process. Thisrelentless work must balance customization to

BOSTON CONSULTING GROUP

different audiences with a consistency of themes
and messages. A variety of technologies canhelp reach different stakeholders and reinforce
overall messages. Regular pulse checks ofthe organization can provide vital feedback tointegration leadership and be used in the next
round of messages.

15

Using Integrations to Turn
Around a Business
Most post-merger integrations are about strengthening the main business through greater scale,
expanded product lines, and new markets. But some acquisitions become the springboard
for transforming the core. Those integrations have the added complexity of changing the target
company’s operations as well as the acquirer’s. BCG has considerable experience in supporting
those efforts, including the following two integrations.

16 									SUCCESSFUL MERGER INTEGRATIONReal Deals, Real Results:
BCG Supported Office Depot’s
Defensive Consolidation

With e-commerce threatening both companies,
Office Depot and OfficeMax agreed to amerger of equals. BCG helped management
set the synergy targets and begin planning
the integration six months before close. Some
decisions, such as which IT system to use or
where to place headquarters, had to be put off
until the close. The IMO moved aggressively on
everything else, while putting forward options
for the later decisions.

BOSTON CONSULTING GROUP

The IMO’s rigorous plans included timelines
for how the businesses would evolve over three
years, helping align functions and manageinterdependencies. All this preparation
enabled the two organizations to start the
integration process immediately on Day 1. The
entire organization, which consisted of 9,000
employees, was redesigned in two months. Cost
savings were 50% higher than targeted, putting
the new company in a much better competitive
position.

17

Real Deals, Real Results:
BCG Helped Konecranes Turnan Acquisition into a Major
Performance Upgrade

Konecranes is one of the world’s largest
providers of industrial and port cranes. In
2017, in the face of increased competition, thecompany was struggling to improve margins
or grow organically. It acquired the Materials
Handling and Port Solutions (MHPS) divisionof Terex, a direct rival. Instead of just seeking
the usual synergies from consolidation,
Konecranes’ management used the deal as acatalyst for higher performance in general.
With help from BCG, the company worked
to rapidly realize substantial cost synergies
by consolidating service locations, closing

18 							factories, streamlining corporate functions,harmonizing product platforms, and reducing
procurement spend. When these moves wereon track to succeed, BCG integration leaders
shifted to optimizing a go-to-market approachand identifying new avenues for growth.
The full program consisted of hundredsof initiatives in nine major work streams,
coordinated by the central IMO and BCG.
The integration hit or exceeded all main
performance targets ahead of time, which
resulted in a strong stock market reaction.
Konecranes closed the profit gap with its wider
technology peer set.

SUCCESSFUL MERGER INTEGRATIONBCG’s Toolkit
BCG has been supporting integrations for more than 25 years. We offer a holistic, proventoolkit, including:

SYNERGY DATABASE

Tracks synergy data fromhundreds of PMI projects
with live, proprietarybenchmarking

HUB BY BCG

Enables andfacilitatescollaboration andcommunication
within the project
team

SYNERGYBUILDERBY BCGTM

Supports BCG’s provenfinance baselining,synergy target
setting, and planning
methodology

KEY BY BCG

Enables rigorous
programmanagementof pre-close
integration
planning and postclose execution andsynergy capture

Unlock your potential

PMI
ToolkitORGBUILDER

Helps manage complex
organizational design
CULTURE SURVEY
Day 1 Checklist
and change efforts
Analyzes cultural similarities
Provides Day 1 priority checklists by function during PMI
and differences, helps indefining the target culture, andsupports change management

DAY 1 CHECKLISTProvides Day 1 priority
checklists by function

In addition to the tools listed in this exhibit, we bring fit-for-purpose tools where relevant(e.g., distribution network design, store footprint, or product portfolio).

BOSTON CONSULTING GROUP

19

Our Support Philosophy
Clients consistently tell us that BCG’s key
differentiator is how we partner with themthroughout the work. We enable them to takeownership, which ensures effective execution
and delivery of results, while also building acapability for future integrations.
We focus our analytical power on the areas withthe most value at stake, while working at the
deepest levels to support successful execution
with no detail or risk ignored. In addition, we
serve as a sparring partner for integration
issues and beyond. We make sure that the
integration’s implications across the entire
business are part of the executive dialogue.

Our breadth as a worldwide organization
enables us to bring deep expertise in industry
and functional topics. We’ve handled the fullrange of integrations, including highly complex
deals like a global integration of a carved-out
business. We draw on expert resources for
go-to-market, supply chain, manufacturing,talent, procurement, corporate functions, andother areas.
Clients vary in their needs, so we offer flexible
resourcing. We take a transparent, collaborative
approach, viewing the BCG consultants and theclient as one team. We revisit resource levels
constantly and adjust as needed—typicallybiweekly—or on an ad hoc basis.

We offer four main support models:

A

B

C

D

Light IMO

Full IMO

IMO andkey issues

Full support

We support the
integration management
office with program
management and financial
baseline and synergies

We add support fororganization and talentmanagement, cultural
integration, change
management, andcommunications

Light or full IMO, plus
direct support for a selectnumber of integration
teams, setting up eachteam and conducting
integration planning

Light or full IMO, plus
heavy support for most or
all integration teams

20 									SUCCESSFUL MERGER INTEGRATION

Lessons Learned

01

02

03

The early days are crucial, as
leaders set the tone for theentire process.

A full-time, organizationallysavvy senior head ofintegration makes all thedifference.

Focus on the areas ofhighest payoff; you can’t get
everything right.

04

05

06

Pre-close preparation
shortens the time to capturesynergies and stabilize thebusiness.

Speed reduces uncertainty,
which can slow downchange.

Organizational and cultural
clashes can derail even thebest plans for synergies.

07
As a major effort in change
management, integrations
require frequent and broad
communication.

BOSTON CONSULTING GROUP

21

Deals That We’ve
Helped Happen
2020
2020

2020

2020

Buying travel vaccine brands:
Rabipur and Encepur from

2020

Buying domestic powerfirm Glow from

Strategic advisor on PMIStrategic advisor on PMIStrategic advisor on PMIStrategic advisor on PMI$890M$1.75B$2B$2.93B

2020

2020

2020

2020

Strategic advisor to thebuyer and on PMIStrategic advisor on PMIStrategic advisor on PMIStrategic advisor on PMI

Value not disclosed$212M$39.9B

Value not disclosed

2020

2020

2020

2020

Strategic advisor on PMIStrategic advisor on PMIStrategic advisor on PMIStrategic advisor on PMI

$21B

$16B

$8.5B

$5.0B

Buying 49.99% of Santander
Securities Services from22 									SUCCESSFUL MERGER INTEGRATION

2019
2019

2019

2019

2019

Strategic advisor on PMI

Clean Team as an integral
part of PMI preparation

Strategic advisor on PMI(TOM and synergy plan)

Strategic advisor on PMI

$524M

$66B

$577M

$1.6B

2019

2019

2019

Strategic advisor to thebuyer and on PMIStrategic advisor on PMIStrategic advisor on PMI

Value not disclosed

$28B

$2.2B

2018

2018

2018

2018

Strategic advisor to thebuyer; Strategic advisor
on PMI

Strategic advisor on PMIStrategic advisor to thebuyer; Strategic advisor
on PMI

Strategic advisor on PMI

Value not disclosed

Value not disclosed$484M$1.88B

2018

2018

2018

2018

Strategic advisor on PMIStrategic advisor on PMIStrategic advisor on PMIStrategic advisor on PMI

$410M

$400M

Value not disclosed

Value not disclosed

2018

2018

2018

2018

Buying 22.5% shares of

2018

Buying core banking
operations ofStrategic advisor on PMIStrategic advisor on PMIStrategic advisor on PMIStrategic advisor on PMI

Value not disclosed

Value not disclosed

Value not disclosed$956M

BOSTON CONSULTING GROUP

23

2017
2017

2017

2017

2017

Strategic advisor on PMIStrategic advisor on PMIStrategic advisor on PMIStrategic advisor on PMI$23.55B$130M

Value not disclosed$1.96B

2017

2017

2017

2017

Strategic advisor on PMIStrategic advisor on PMIStrategic advisor on PMIStrategic advisor on PMI$2.6B$1.25B

$760M

$370M

2017

2017

2017

2017

Strategic advisor on PMIStrategic advisor on PMIStrategic advisor on PMIStrategic advisor on PMI

$550M

$340M

$200M

$170M

2017

2017

2017

2017

Strategic advisor on PMIStrategic advisor on PMIStrategic advisor on PMIStrategic advisor on PMI

$1B

$120M

$650M

Value not disclosed

24 									SUCCESSFUL MERGER INTEGRATION

Meet Our Team
BCG’s experts represent a richly diverse group whose experiencecomes from solving the key issues faced by companies aroundthe world. For every focus area, we also have local experts who
provide pivotal insights into the dynamics of individual markets.

TRANSACTION & INTEGRATION EXCELLENCE GLOBAL AND REGIONAL LEADERSHIP

Jeff Gell
Managing Director and Senior Partner
Jeff Gell is a Managing Director and Senior Partner based in BCG’s Chicago office. He
is a core member of BCG’s Consumer, Operations, and Corporate Finance and Strategy
practices and leads the Transaction and Integration Excellence business globally.

Dr. Matthias Krühler
Managing Director and Partner
Dr. Matthias Krühler is a Managing Director and Partner based in BCG’s Hamburg office.
He is Global Head of Transactions in Utilities and also Head of PMI in the Germany andAustria region.

Chris Barrett
Managing Director and Partner
Chris Barrett is a Managing Director and Partner based in BCG’s Dallas office. He joined
BCG in 2001, and has worked on post-merger Integrations across many industries, geographies, and topics. Chris has also worked in our Los Angeles and Amsterdam offices.

Dr. Jens KengelbachManaging Director and Senior Partner
Dr. Jens Kengelbach is a Managing Director and Senior Partner based in BCG’s Munich
office. He is the Global Head of M&A and Leader of the BCG Transaction Center.

BOSTON CONSULTING GROUP

25

Daniel Friedman
Managing Director and Senior Partner
Daniel Friedman is a Managing Director and Senior Partner based in BCG’s Los Angeles
office. He is the Los Angeles Office Leader and the Leader of the Transaction and Integration Excellence business in North America.

Jesper Nielsen
Managing Director and Senior Partner
Jesper Nielsen is a Managing Director and Senior Partner based in BCG’s London office.
He is currently the Regional Leader of our Transaction and Integration Excellence business in Western Europe and South Africa.

Teemu Ruska
Managing Director and Senior Partner
Teemu Ruska is Senior Partner and Managing Director based in BCG’s Helsinki office.
He is the Regional Leader of our Transaction and Integration Excellence business in Central and Northern Europe and Middle East.

TRANSACTION & INTEGRATION EXCELLENCE MANAGING DIRECTORS AND PARTNERS

Matt MooneyManaging Director and Partner
Matt Mooney is a Managing Director and Partner based in BCG’s Los Angeles office. He
joined BCG in 1996, working in the Auckland and Boston offices for four years before earning his MBA at Stanford University. Matt has extensive global experience of merger integration programs and previously spent five years in the Private Equity industry.

Lianne Pot
Managing Director and Partner
Lianne is a Managing Director and Partner based in BCG’s Los Angeles office. She joined
BCG in 2005 and primarily works in industrial goods, including the automotive sector,
and is experienced in media. She has deep expertise in PMI, transformations, and organizational topics.

26 									SUCCESSFUL MERGER INTEGRATION

Jeremy BooteManaging Director and Partner
Jeremy Boote is a Managing Director and Partner based in BCG’s London office and has
over a decade of consulting experience. His expertise is in Value Creation within Corporate Strategy and Transformation and End-to-End Transaction Support (Private Equity andCorporates) with a focus on consumer-facing businesses.

Edward Gore-Randall
Managing Director and Partner
Edward Gore-Randall is a Managing Director and Partner based in BCG’s London office.
He leads BCG’s Transaction Center and the M&A topic for the Western Europe, SouthAmerica, and Africa region as well as the London-Amsterdam-Brussels system.

TRANSACTION & INTEGRATION EXCELLENCE PARTNER AND ASSOCIATE
DIRECTOR EXPERTS

Sébastien Bard
Partner and Associate Director
Sébastien Bard is a Partner and Associate Director based in BCG’s Paris office. He joined
BCG in 2009 and is a core member of the Financial Institutions practice and specializes
in leading large-scale transformation and PMI programs.

Jonathan Beck
Partner and Associate Director
Jonathan Beck is a Partner and Associate Director based in BCG’s Dallas office. He
joined BCG in 2010 and primarily works in the Consumer, Health Care, and Transportation sectors and has significant experience in post-merger integration and transformations.

BOSTON CONSULTING GROUP

27

Niamh Dawson
Partner and Director
Niamh Dawson is a Partner and Director based in BCG’s London office working primarilyin BCG’s Transaction Center. She is an expert on PMI, change management, and culture.

Rogier de Boer
Partner and Associate Director
Rogier de Boer is a Partner and Associate Director based in BCG’s New York office. He
joined BCG in 2011. Previously, Rogier was a consultant at Accenture specializing in
growth and innovation.

Mic RosielloPartner and Associate Director
Mic Rosiello is a Partner and Associate Director based in BCG’s Boston office. He joined
BCG in 2006 and mainly focuses on Post-Merger Integration in Health Care, but also
works with clients in a variety of practices, including Consumer Goods & Retail, Technology, and Financial Services.

Kim ThomasPartner and Associate Director
Kim Thomas is a Partner and Associate Director based in BCG’s Copenhagen office. He
is BCG’s Global Topic Leader for carve-outs and a core member of the BCG Transaction
Center.

28 									SUCCESSFUL MERGER INTEGRATION

Read All About It
Our clients operate in nearly every industry and region aroundthe world, and they come to us for fresh approaches to theissues that matter most to them. Through a rigorous analysis
of each client’s individual situation, we develop customized
solutions that meet the organization’s specific needs. The caseexamples here illustrate how we help clients sharpen theircapabilities, create value, and deliver sustainable advantage.

Transaction and Integration
Excellence Product Series

The Clean Team Advantage

Successful Due Diligence

How BCG Enhances M&A Success

How BCG Supports Strategic Due Diligence

The Clean Team
Advantage
How BCG Enhances
M&A Success

Successful Due Diligence
How BCG Supports Strategic
Due Diligence

Successful Business Separations

Successful Target Search

How BCG Supports Carve-Outs

How BCG Helps Find Strong M&A Candidates

Successful BusinessSeparations
How BCG Supports
Carve-Outs
BOSTON CONSULTING GROUP

Successful Target Search
How BCG Helps Find Strong
M&A Candidates

29

Sell-Side Success
How BCG Supports Divestitures

Sell-Side Success
How BCG Supports
Divestitures

Successful
and Dual Tracks

Successful IPOs,
Spin-Offs, andDual Tracks
How BCG Supports
Effective Transactions

Successful Merger Clearance
How BCG Helps Clear the Path for Acquisitions

Successful Merger
Clearance
How BCG Helps Clear
the Path for Acquisitions

The 2020 M&A Report
Alternative Deals
Gain Traction

Post-Merger
Integration
Unlocking the value30 									SUCCESSFUL MERGER INTEGRATIONBoston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture
their greatest opportunities. BCG was the pioneer in business strategy when it was founded in 1963. Today, we help clients withtotal transformation—inspiring complex change, enabling organizations to grow, building competitive advantage, and drivingbottom-line impact. To succeed, organizations must blend digital and human capabilities. Our diverse, global teams bring deepindustry and functional expertise and a range of perspectives to spark change. BCG delivers solutions through leading-edge
management consulting along with technology and design, corporate and digital ventures—and business purpose. We work in auniquely collaborative model across the firm and throughout all levels of the client organization, generating results that allow ourclients to thrive.
© 2021 Boston Consulting Group. All rights reserved. 09/21
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