M&A Conference: Global M&A Transactions and Integration from a Swiss Perspective

This year’s M&A conference explored megamergers from a Swiss perspective, focusing on the three economic areas of China, Europe, and the US and exploring two key questions: What are investors looking for, and how do promoters integrate and transform target companies?

1_Suzanne Ziegler

Suzanne Ziegler, Director of the Department of Banking, Finance, Insurance welcoming participants

 

Markus Braun describing the globalization of industrial sectors

Markus Braun describing the globalization of industrial sectors

Dr. Markus Braun, Head of International Business at the Department of Banking, Finance, Insurance, discussed the issue of foreign investors buying Swiss companies. The growing confidence in Europe’s economic recovery has increased investors’ appetite for M&A deals. In the same way that Syngenta was acquired by Chemchina in 2017, a relatively large number of large companies has recently been taken over in Switzerland. While whole sectors are globalizing, megamergers are made possible by fast global access, cost synergies, and digitization. In the light of this trend, it is important, according to Markus Braun, “to keep in mind that Swiss companies invest much more in overseas markets than overseas companies invest in Switzerland. Swiss companies therefore play a very active part in the globalization process.” Braun illustrated his points using the brewery sector and the agro-chemical and chemical industries. He concluded that “global consolidation produces one or a few global leaders and leaves room for small local/regional players.

 

“A strategic fit is THE foundation for a successful transaction and integration.”

“A strategic fit is THE foundation for a successful transaction and integration.”

Next, Riet Cadonau, CEO of dormakaba, explained the success factors of the highly successful integration of Dorma and Kaba that led to dormakaba, a world market leader. For Cadonau, fast and consistent decisions regarding the management team and a “the best for the new” approach are decisive aspects of a successful post-merger integration. For example, the merger required dormakaba to choose a single IT system. “After 27 years of using Microsoft Outlook, I had to switch to Lotus Notes – and I survived”, Cadonau said.

A merger also affects the corporate culture and therefore requires special attention. It is essential to define values that the management team can itself exemplify. The rest is all about “communication, communication, communication!”

 

Insight into and an outlook of outbound and inbound M&A transactions were provided by Dr. Claude Fuhrer, Partner at PwC. In 2016, Switzerland had more than 400 M&A activities with a total volume of over USD 90 billion. And the first half of 2017 already saw two deals that were responsible for the large deal volume, namely Huntsman/Clariant and Actelion/Johnson & Johnson. China dominated cross-border activity into Switzerland in 2016. That was also the year in which foreign companies have taken over more companies in Switzerland than vice versa. In his outlook, Fuhrer told his audience: “We expect a sustained positive M&A environment, slightly hampered by uncertain economic conditions but with Swiss company executives being bullish with regard to their own M&A activity.”

4_Claude Fuhrer

Dr. Stephan Bergamin addressed the question of how to integrate target companies, using his 5-step model. He introduced the new book “Mergers and Acquisitions. Integration and Transformation Management as the Gateway to Success” which he has co-authored with Markus Braun and which provides first-hand lessons learned from over 30 international M&A transactions, including the two major global merger cases of dormakaba und LafargeHolcim.

 

Panel discussion (from left to right) chaired by Markus Braun (ZHAW), Reto Föllmi (University of St. Gallen), Claude Fuhrer (PwC), Stephan Bergamin (Gearbulk Group), and Riet Cadonau (dormakaba Group).

Panel discussion (from left to right) chaired by Markus Braun (ZHAW), Reto Föllmi (University of St. Gallen), Claude Fuhrer (PwC), Stephan Bergamin (Gearbulk Group), and Riet Cadonau (dormakaba Group).

Dr. Reto Föllmi, Professor of International Economics at the University of St. Gallen, joined the panel and contributed his observations of the big global mergers from a macroeconomic perspective.

The next M&A Conference has been scheduled for Tuesday, 4 September 2018.

Contact: Dr. Markus Braun and Hanka Heimpold, Department of Banking, Finance, Insurance

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