Integration Handbook 2017 Post-Acquisition Integration ...

1 Post-Acquisition Integration HandbookClosing the deal is just the beginning2017 Post-Acquisition Integration Handbook 2017 Baker & McKenzie. All rights reserved. Baker & McKenzie International is a Swiss Verein with member law firms around the world. In accordance with the common terminology used in professional service organizations, reference to a partner means a person who is a partner, or equivalent, in such a law firm. Similarly, reference to an office means an office of any such law firm. This may qualify as Attorney Advertising requiring notice in some jurisdictions. Prior results do not guarantee a similar outcome. Baker & McKenzie Global Services LLC / 300 E. Randolph Street / Chicago, IL 60601, USA / +1 312 861 McKenzie helps clients overcome the challenges of competing in the global economy. We solve complex legal problems across borders and practice areas. Our unique culture, developed over 65 years, enables our 13,000 people to understand local markets and navigate multiple jurisdictions, working together as trusted colleagues and friends to instill confidence in our clients.

2 McKenzie l 1 Post-Acquisition Integration HandbookClosing the deal is just the beginningPost-Acquisition Integration HandbookClosing the deal is just the beginning2 l Baker McKenzieIMPORTANT DISCLAIMERAll of the information included in this Handbook is for informational purposes only and may not reflect the most current legal and regulatory developments. This information is not offered as legal or any other advice on any particular matter, whether it be legal, procedural or otherwise. It is not intended to be a substitute for reference to (and compliance with) the detailed provisions of applicable laws, rules, regulations or forms. Similarly, it does not address any aspects of the laws of jurisdictions outside the specific jurisdictions described, to which a company may be subject. All summaries of the laws, regulation and practice of Post-Acquisition Integration are subject to change and, unless otherwise noted, are current only as of 31 March McKenzie, the editors and the contributing authors expressly disclaim any and all liability to any person in respect of the consequences of anything done or permitted to be done or omitted to be done wholly or partly in reliance upon the whole or any part of the contents herein.

3 No client or other reader should act or refrain from acting on the basis of any matter contained in this Handbook without first seeking the appropriate legal or other professional advice on the particular facts and Handbook may qualify as Attorney Advertising requiring notice in some jurisdictions. Baker & McKenzie International is a Swiss Verein with member law firms around the world. In accordance with the common terminology used in professional service organizations, reference to a partner means a person who is a partner, or equivalent, in such a law , reference to an office means an office of any such law firm. References in this Handbook to Baker McKenzie include Baker & McKenzie International and its member law firms, including Baker & McKenzie LLP. This Handbook itself does not create any attorney/client relationship between you and Baker McKenzie nor does it create a contractual relationship between you and Baker McKenzie.

4 2017 Baker & McKenzie rights reservedBaker McKenzie l 3 IntroductionIt is a time of relentless volatility and ambiguity, with the complexities of globalization, economic and political uncertainty, disruptive new business models, cyber insecurity and multiplying layers of regulation causing a constantly changing business landscape. Our clients want a new breed of lawyers who can look a decade or more ahead and can offer a fresh approach to helping them navigate a challenging market. At Baker McKenzie our people work across borders and sectors to simplify complexity and give our clients confidence in doing business in today s unpredictable have a strong track record of working successfully with multinationals to integrate and restructure their business operations. As one of only a handful of law firms with a dedicated Global Reorganizations Practice, we are in a unique position to assist companies in planning and implementing Post-Acquisition Integration projects.

5 By strategically addressing all legal and tax implications with an integrated approach, we help our clients to manage change effectively in order to deliver better value from their acquisitions with less business Handbook serves as a practical reference tool for any company contemplating, or in the process of executing, a multinational business acquisition and Integration . Key topics such as tax, corporate law, employment and compliance are considered and regional comparison tables summarize the main tax, employment and corporate aspects of integrations in more than 40 Integration HandbookClosing the deal is just the beginning4 l Baker McKenzieBaker McKenzie l 5 Table of ContentsSection 1 Overview 7 Section 2 Post-Acquisition Integration : Developing 9 and Implementing a Plan Section 3 Process: Process Map, Timeline and Checklist 25 Section 4 Antitrust/Competition Considerations 52 in the Pre-Merger Integration Phase Section 5 Tax Considerations 56 Section 6 Employment 100 Section 7 Employee Benefits/Equity Awards 145 Section 8 Compliance and Risk Management 153 Section 9 Cross-Border Mergers in the EU 169 Section 10 Summary of Local Integration Methods 181 Section 11 Baker McKenzie Offices Worldwide 250 Table of ContentsPost-Acquisition Integration HandbookClosing the deal is just the beginning6 l Baker McKenzieBaker McKenzie l 7 Section 1 OverviewClosing the deal is just the beginning.

6 The majority of acquisitions fail to meet pre-deal expectations, and the real challenge for any company acquiring a business is ensuring that the acquisition delivers the value that motivated the decision to do the deal in the first place. In a low growth environment, management are under increasing pressure from shareholders to focus more attention on how they achieve can be elusive. Where the acquirer and target businesses operate in the same or complementary fields, it is almost always the case that the acquirer will want to integrate the two businesses with a view to saving costs and generating value for its shareholders through meeting synergy targets. But bringing together businesses with different trading relationships, histories and cultures inevitably poses substantial challenges, which can hamper the achievement of those synergy targets particularly in the short and medium term. Where the businesses of the acquirer and target are multinational, the scale and number of those challenges increase aim of this Handbook is to provide a practical reference tool for any company contemplating, or in the process of executing, a multinational business acquisition and Integration .

7 Providing a guide to the process of identifying the issues to be addressed, and of planning the Integration and its legal implementation, it seeks to assist acquirer companies to develop the best strategies to overcome the challenges and deliver maximum value to shareholders from the acquisition. Every acquisition will bring its unique business, operational and cultural challenges and this Handbook is designed to be used in conjunction with the planning that a multinational group will do to address these specific issues raised in this Handbook are likely to be of general application to acquiring groups headquartered in any jurisdiction, though a number of examples highlight issues particularly relevant to acquirers headquartered in the United Handbook is built around a customary situation where the parent company of one multinational group acquires all of the shares or assets of the parent or intermediate holding company of another multinational group.

8 This ordinarily creates a corporate structure containing two separate chains of international subsidiaries, with the likelihood that in many territories the newly enlarged group will have duplicate operating and holding companies. These individual companies will have their own separate management structures, IT systems, trading relationships and intra-group arrangements. Integrating these structures, relationships and arrangements in the Post-Acquisition environment can prove to be one of the most significant challenges that management will have to 1 OverviewPost-Acquisition Integration HandbookClosing the deal is just the beginning8 l Baker McKenzieExperience has taught us that the key to developing an effective Post-Acquisition Integration plan, implementing it successfully, and overcoming the inevitable challenges, is the early identification of the overriding strategic and business objectives of the acquisition and subsequent Integration .

9 Provided that these objectives are realistic and supported by management, and that proper and prioritized attention is given by the right people at the right time to the planning and implementation of the Integration , the likelihood of delivering on pre-deal expectations will be significantly McKenzie l 9 Section 2 Post-Acquisition Integration : Developing and Implementing a PlanThis section: provides an overview of the ways in which a global Integration process can be managed to maximize the chances of success summarizes the more common substantive issues companies are likely to encounter in planning and implementing Integration projects sets out an Indicative Sample Timeline and Summary Overview for an Integration projectSeveral of the key issues covered in this Section 2 are expanded upon in subsequent sections of this Handbook . 1 An Open and Collaborative ProcessAny large Post-Acquisition Integration project raises issues of business strategy, process management and technical expertise.

10 Once a theoretical Integration plan has been developed, practical implementation issues will prove critical in determining how quickly the plan can be implemented and how soon the benefits of the Integration can be realized. Human resource considerations, corporate and tax law issues, and regulatory approval and filing requirements should all be built into the planning process itself and not be left to the implementation phase. The project team should give particular focus at an early stage to navigating road-blocks that might otherwise delay or frustrate the realization of Integration goals in many well-run Integration process can customarily be broken down into seven phases: identification of key strategic objectives information gathering preliminary analysis and development of overall plan initial evaluation of overall plan development of detailed step lists evaluation and approval of detailed step lists implementation of steps in final detailed step listsSection 2 Post-Acquisition Integration .