New expert on board: Three questions for Friederich von Hurter

Having spent many years as post-merger integration expert, he became a partner for M&A integration at PwC Germany on 1st April 2017.

Mr. von Hurter, you have recently joined the M&A Integration team. Could you tell us a little about your background?

Friederich von Hurter: Since finishing my degree at the University of St. Gallen, I have continuously focused on companies in transformation. M&A integrations are a key driver of transformations, so I increasingly concentrated on them. After roles at Capgemini Consulting and Otto & Company, I am now looking forward to my tasks at PwC in the area of “Delivering Deal Value”. As Germany’s leading auditing and consultancy firm and an independent member of the global PwC network, we are able to deliver genuine added value for our clients at an international level. This is a major advantage especially in the field of transactions and transaction implementation, and not only applies to M&S integrations but also to other services such as split-offs and diligence services.

What do you think matters during M&A integration?

von Hurter: I personally identified three key success factors for integration in the last few years, which incidentally are also reflected in our recently published study:

One the one hand, a clear objective must be defined. In the absence of a vision and clear strategic rational, it is hard to integrate a company or business unit sustainably and efficiently, and to generate the anticipated added value for both sides.

We also consider speed to be a success factor. Not only because things move quickly nowadays, but also because it is important to use the momentum of the merger – including in the integration that follows. First, synergies must be exploited early on, and secondly, all affected employees must quickly be integrated into a new overall construct to be able to live up to their full potential. Of course the same also applies to all other stakeholder groups, such as customers and suppliers.

The third, and most important, success factor for the integration project per se is complexity control. Integration does not take place in a vacuum. Today, companies experience constant change. M&A integration is another disruptive event. An integration project can only be successful if it uses the best technical and detailed planning. This is the case not only because normally, all units and roles of a company are affected, but also because the many dependencies within an integration project make it a very complex task. Particularly during the implementation phase, a merger must be implemented without putting ongoing business at risk.

And how can this be done? Can you give us an example from your experience as a consultant?

von Hurter: Most recently, we were able to support a very successful integration project in the field of replacement part management. The relevant managers agreed a strategic objective for the new organisation even before the acquisition had been legally fulfilled, and as such set clear priorities. This enabled them to highly efficiently develop a consistent joint business model as well as a new structure and process organisation. A wide-ranging Integration Management Office (IMO) was set up, and this was also considered to be very important to identify dependencies and ensure integration of core and support areas. The IMO acts as a central point of call for questions and suggestions, and as such it is a means of ensuring integration efficiency and speed. Modern decentralised project management and data analysis tools were used to also integrate distant regional branches into the project. Proactive change and communication management further provided transparency in relation to core aspects and integration progress. We used additional functional experts who joined processes, responsibilities and systems in specific corporate functions. This resulted in an integration which met its economic targets in a timely manner and did not lose any key employees in spite of initial scepticism.