200212 MA Checklist OW

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C O N F I D E N T I A L | www.oliverwyman.com

Mergers & AcquisitionsChecklist

December, 2002


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1CASECODE-FILENAME (YYYYMMDD Descriptor).ppt Oliver Wyman www.oliverwyman.com

Oliver Wyman perspective: Getting ready to mergeMerger preparation should start before a merger is announced.

Create your team

Get them ready

Develop apreliminary gameplan

Screen andidentify

potentialcandidates

Negotiateterms andagree tomerge

Announce

themerger

Plan theintegration

T h e M & Ap r o c e s s

The g e t t i n greadyp r o c e s s

Start here to

maximizemerger benefits

. . .

. . . and not here

Conduct

duediligence

Meet with

potentialcandidates


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Create your teamSelecting key participants early helps to establish ownership andaccountability for future success.

Senior team

Organizational redesign andHR issues

Legal and regulatoryInformation technology

Communications

Facilities

Wholesale

T&D

Customer service

Operationssupport

Corporate support

Individuals to managecorporate-wide issues

Individuals to leadfunctional integration

teams

Integrationproject manager

M o s t i m p o r t a n t p a rt i c i p a n t s

Establish overall approach

Set merger objectivesMake final decisions

Lead day-to-day effort

Manage teams

Credibility and leadershipInterpersonal and analyticalskillsStrategic perspectiveComfort with change

Des i red a t t r ibu tes


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Get them readyTraining M&A participants can shorten the integration process andincrease merger savings.

Lega l and regu la to ry p rocess

Federal-level approvals, including Hart-Scott-RodinoState-level approvalsOverall timetable

Captur ing m erger benef i t s

Potential revenue growthPotential cost savingsCosts to achieve

In tegra t ion p lann ing

Typical work plan and scheduleDeliverables and integration updateTeam roles and responsibilities

Day 1 Requirem ents

Legal and regulatoryContractualFiduciary and financialInternal and external communicationsSystemsHuman resources

Tra in ing a reas fo r a l l pa r t i c ipan t s

Working with senior management at the other companyDecision making during the planning process

Potential organizational models for merged companiesCommunicating to internal and external audiences

Addi t iona l t r a in ing fo r M& A leadership andmanagement

Areas to investigate (by function)Information to collectField visits and discussionsEstimating potential savings and cost to achieve

Addi t iona l t r a in ing fo r due d i l igence and synergyt e a m s

Working with team members from the other companyMost likely areas for revenue growth and cost savingsKey metrics to review; relevant benchmarksEvaluation and decision-making criteria

Addi t iona l t r a in ing fo r func t iona l in teg ra t ion t eams


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Develop a preliminary game planEvaluating current processes and systems early helps to raise critical issues.

Func t i on Cur r en t c os tc o m p e t i t i v e -ness

Ca l l cen t e r opera t ions

Currentp e r f o r m a n c e

Sca lab i l i ty o f p rocessesa n d s y s t e m s

Pre-mer ger evaluat i on

Meter r ead ing

Bi l l ing

Payment

process ing

Cred i t andc o l l e c t i o n s

Exam ple : Cus tom er se rv ices

Low High

Do we have a viableplatform for growth?

If not, should we invest inbuilding one?

What assets and

capabilities should we beseeking in a mergerpartner?


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Who we areWe recently joined forces under the name Oliver Wyman, creating one of the worlds leadingmanagement consultancies.

The new Oliver Wyman combines deep industry knowledge with specialized expertise in strategy,operations, risk management, organizational transformation, and leadership development.


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What we doOliver Wymans Utilities Practice helps our clients create value by providing businessstrategy and operational improvement services to address the breadth of issues facingelectric and gas utility companies.

Generation

strategyAsset sales

Power plantcompetitiveness

Gas explorationand production

Fuels strategy

Bulk power

alliances andentry strategy

Bulk powermarketingstrategy

Gas supply andtransportation

Separation of assets

and operationsProject planning andengineering

Construction andmaintenance

Outsourcing andalliances

Gas control

Asset management and

engineeringBack office and supporteffectiveness

Reliability and servicerestoration

Work management andfield force productivity

Meter-to-cash

(Collections)strategy

Call centeroptimization

Meter reading andbilling

New servicedelivery

Marketing and pricing

Branding strategy

Profitability analysis

Alliances, e.g.,telecommunications,water

Enterprise-Wide

Strategy and

Value Creation

Organizational

Effectiveness

Performance

Improvement

ElectricGeneration &Gas Supply

WholesaleMarketing

and TradingTransmission Distribution CustomerService

RetailServices

Value-driven businessdesign

Mergers and acquisitions

Regulatory support

Organizational redesign

Restaffing

Alignment and redesign ofcorporate and supportservices

Benchmarking andperformance management

Process redesign andimplementation

Supply chain management

Wholesale Business Distribution and Retail Businesses


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Documents

200212 MA Checklist OW