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Human Capital Merger, Acquisition and Divestiture Restructuring and Organization Design

Be swift, be purposeful – and do it right


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Shortcuts are tempting when you’re under the gun to combine two companies. Some buyers delay conflict by leaving the acquired organization intact. Others force-fit new employees into the parent organization, hoping to accelerate synergy savings. But without a smart plan, short-term benefits may be offset by increased risks from different stakeholders. Worried employees. Lame-duck leaders. Departing talent. Dissatisfied customers. And more. Since people-related synergies are often one of the largest value drivers in a deal, why take unnecessary chances?

Deloitte advises corporate buyers and private equity investors throughout the entire M&A deal life cycle. Our consulting, audit, tax and financial advisory professionals – including approximately 3,000 human capital M&A specialists – have supported some of the most complex global integrations and divestitures in business history. Learn more about the offering.

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The first time
Organization restructuring in the midst of integrating two companies may sound overly ambitious. But a smart organization design can be the fastest route to capturing near-term savings while executing longer-term business strategies. Start with your business strategy and the future operating model for the combined company, then design the structure and roles you’ll need to make it happen, looking for ways to incorporate the best from both legacy companies. Transformation doesn’t happen overnight, so you need a smart transition plan and clear communications to stakeholders all along the way. It’s not easy, but companies that do it right the first time are often rewarded with higher synergy savings and improved productivity.

How we can help

Deloitte advises corporate buyers and private equity investors throughout the entire M&A deal life cycle. Our consulting, audit, tax and financial advisory professionals – including approximately 3,000 human capital M&A specialists – have supported some of the most complex global integrations and divestitures in business history.

Here are some of the services we provide:

  • Organization design. Create organizational structures, roles and metrics needed to execute the business strategy and capture synergy, including a tailored, phased approach to implementation.
  • Selection. Develop a clear and fair process for employee selection, separation and deployment – and make it as transparent as possible.
  • Workforce transition. Promote workforce stability during the transition by fostering employee engagement and productivity. Train acquired employees on processes and systems and help them adapt to the company culture. Remember, though, it may be that the acquired company has the better processes. Be sure to get the best of both worlds.
  • Data management. Track and control costs associated with relocation, retention, severance and training plans.

Bottom-line benefits

  • Organization design that supports the vision for the combined company
  • More efficient operations and improved performance
  • Higher and quicker integration synergy savings
  • Retention of top talent in both organizations
  • Less business disruption during the transition and integration

Five ways to get more value now

Start with the end in mind. Imagine the organization structure that you will need to support your business strategy and operating model three years from now. Should your company be structured around geographic territories, products or customers? What type of leaders will you need? What current operations can be outsourced or consolidated? How will you get from here to there?

Think roles, not people. Avoid designing an organization around specific people. Instead, design roles based on the qualities and abilities you’ll need to execute the business strategy. Then look for people – from both organizations – who can fill those roles. Also consider recruiting from the outside if the right talent isn’t available.

Hang on to key talent. Don’t let valuable talent slip away during the transition and the uncertainty it creates. Identify key employees early and develop a plan for keeping them on board and productive. Competitors will jump at this opportunity to entice your talent away.

Prepare for emotion. Organization changes can stir up emotional responses from people who don’t agree with your decisions. Anticipate how individuals – and the people who work with them – may react to changes in responsibilities and power. Clear and early communications with all stakeholders can help soothe, but probably not eliminate, emotional turmoil. You can head off some problems by explaining the rational behind the organization design, how the selection process will work and the timeline for change.

Get a handle on employee data. An acquired company’s employee data is often surprisingly difficult to obtain, store, update and report. Spend time upfront figuring out which tools, technology, processes and historical data you’ll need and how you’ll obtain it.

Human Capital M&A in action

  • A global insurance carrier acquired a national carrier for $1.5 billion. Post-merger efforts included integrating operations, branch consolidation, sales force integration and broker-dealer conversion. We helped this client transition more than 700 financial professionals from the acquired company, along with 51,000 accounts, which included approximately $6 billion in managed assets and 120,000 life and annuity policies.
  • Two large oil and gas companies wanted to integrate organizations and processes to capture savings, eliminating duplicate roles and centralizing services. They looked to Deloitte to help them meet their aggressive timeline for streamlining processes and consolidating their combined organization, resulting in a headcount reduction of 13 percent on day one.
  • An enterprise telecommunications and call center systems company, owned by two private equity groups, purchased significant parts of a major competitor that had declared bankruptcy. We helped our client combine the organization structures and select approximately 5,000 employees (a 25 percent workforce reduction) as part of the acquisition. We also provided support for a smooth employee transition, including implementing a communications strategy that minimized loss of key talent.

As used in this document, “Deloitte” means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.

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