HRM Term Project M&a RBS 131107 r1

8/6/2019 HRM Term Project M&a RBS 131107 r1

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Term Project

Human Resources Management

SML 731

Course Co-ordinator: Ms Kanika T Bahl

Group -6

01. Vijay Barthwal 2007 SMN 707702. Vinod Mittal 2007 SMN 707103. Seema Rabha 2007 SMN 7091

04 Sudhanshu Srivastava 2007 SMN 711705 Devabrat Bohra 2007 SMN 705706 Saurabh Narang 2007 SMN 7115

16 Nov 2007


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HRM term project 16 Nov 07 Mergers and acquisitionsThe RBS way

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Mergers and AcquisitionsA case study of RBS Group


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AGENDA

Mergers and Acquisitions

Growth of RBS

M & A The RBS way

Conclusions

2 min

3 min

6 min

2 min


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-To create shareholder value over and above that of the sum ofthe two companies

-To create a more competitive company

-Gain a greater market share

-Achieve greater efficiency

Why M & A..

1 1 3+ =

Target companies will often agree to be purchased when theyknow they cannot survive alone


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5

M & A Lifecycle

Conception

Planning

First100Days

DueDiligence ofIP (Intellectual Property)

OngoingEvaluation &Improvement

Merger


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-Top managers coping with a merger-Spreading their time too thinly-Neglect of core business

-Decision to acquire-Typically based on product or market synergies-Cultural differences are often ignored

- A McKinsey study concludes that following mergers-Often companies too intent focus is on cutting costs-Result : revenues, and ultimately, profits, suffer

- Hewitt survey, in all regions of the world, found that top challenge postM&A are

-Integrating organizational cultures-Keeping employees focused-Integrating employee programs

Why it fails..


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HRM term project 16 Nov 07 Mergers and acquisitions

The RBS way7

AGENDA


Growth of RBS

M & A The RBS way

Conclusions


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The RBS way8

The Royal Bank of Scotland Group-

- is one of the world's leading financial services providers

- One of the oldest banks in the UK

- By current ABN AMRO acquisition it has becomenumber one bank in UK

- Fifth largest in the world by market capitalization

What is RBS ?


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The RBS way9

-1727: Founded in Edinburgh by royal charter

-1783 : Opened its first branch office in Glasgow

- 1874 : Opened a branch office in London-1920s :Developed by acquisition, a major presence in England

Royal Bank of Scotland is born..

Growth of RBS

Mergers in Initial PhaseDrummonds (established c.1712)

Williams Deacon's Bank (established 1836)

Glyn, Mills & Co (established 1753)

Child & Co (established c.1580s) and the list goes on..


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The RBS way10

1980s : Group diversified, set up an insurance company, Direct Line

1988 : Acquired Citizens Financial Group (estd. 1828), Rhode Island

(USA)

1994 : Launched Direct Banking, which quickly became Britain's

fastest growing twenty-four-hour telephone banking operation

Diversification

Early bird in online banking

1997: UK's first fully-fledged on-line banking service over the internet

Joint financial services ventures with both Tesco and Virgin Direct

Growth of RBS Cont


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The RBS way11

2000 : Acquired National Westminster Bank plc, in the biggest takeoverin the history of British banking

This merger created a huge Group, with a highly diversified portfolio

of services for personal, business and corporate customers.

Returned to growth by merger

Growth of RBS Cont

Recently Consortium led by RBS acquired ABN AMRO bankfor $100 bn, with RBS retaining the global control of retailbanking operation of ABN AMRO bank


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The RBS way12

"this is about growth. We need people to do that"Sir Fred Goodwin, CEO,RBS Group

RBS EGM, August 10th 2007

An opportunity for growth


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The RBS way

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AGENDA


Growth of RBS

M & A The RBS way

Conclusions


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The RBS way

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Integration of Acquired Company

Operational

Integration

CulturalIntegration

Back office

Integration


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The RBS way

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Operational Integration

RBS Group

National

WestminsterBank

COUTTS& Co

UlsterBank

CitizensChild & Co

Adam &

Company

Isle ofMan Bank

Drummonds

DirectLine

ABNAMRO

All the banks which RBS has acquired remain an independent identity to the external

customer to the extent that customers are really not aware of the fact that the bank with

which they have been dealing is in effect some other bank in the background


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The RBS way

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Formulation of aproject Team

Understanding the impact of ITbefore the dealis done

Categorising the functions

Comprehensive report withKey deliverables

Applyingpareto principleto remain focussed

Back-office Integration


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The RBS way

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Planning theProcess

Creating CultureFit

The New Due Diligence

Integrating HRFunctions

HRs role in acquisition & merger

Communication strategy

The Seven-Step Communication method

Cultural Integration : Processes


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The RBS way

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1. Development of preliminary organizational designs and

identification of the top three levels of management

2. Assessment of critical players and deployment of appropriate

resources in the new company

3. Retention of key people and separation of redundant staff

4. Development of a total rewards strategy for the combined

companies

5. Communications strategy development and implementation

6. Integration of payroll benefits and HR-IS

An ability to do all of the above with speed

Cultural Integration : HR initiatives


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The RBS way

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1. Take definitive action and make decisions quickly--the secret forholding onto good people.

2. Be candid with employees, and treat them with respect. Let them

know that the combined entity will be a more valuableorganization.

3. Whenever possible, use ownership of the company asrepresented by stock options and stock grants to get everyone

pulling in the same direction.

4. Be honest about the people decisions that must be made.

5. Treat those leaving with the same respect and attention as those

staying.

Cultural Integration:Guiding principles


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The RBS way

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AGENDA


Growth of RBS

M & A The RBS way

Conclusions


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The RBS way

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Integrate fast. Realize synergies and efficiencies sooner rather than later.

Dedicate the necessary resources.

Make tough decisions about organizations and people quickly.

Restructure and re-recruit top talent.

Set clear, short-term objectives; celebrate successes as you achieve them.

Communicate strategically; be open and forthright.

Allow the acquired company to conduct business. After all, that's why you

acquired it.

Manage the culture integration carefully.

Focus on what each event means to individuals.

Keep your sense of humor.

Conclusions


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The RBS way

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http://findarticles.com/p/articles/mi_m 4467/is_10_54/ai_66499153

http://www.investopedia.com/university/mergers/mergers6.asp

http://www.hewittassociates.com/Intl/AP/en-AP/AboutHewitt/OurClients/m-amanagement.aspx

http://findarticles.com/p/articles/mi_m 4467/is_10_54/ai_66499153http://www.investopedia.com/university/mergers/mergers6.asp

http://www.hewittassociates.com/Intl/AP/en-AP/AboutHewitt/OurClients/m-amanagement.aspx

http://www.ewin.com/articles/manda.htm /

http://findarticles.com/p/articles/mi_m 4467/is_10_54/ai_66499153

http://www.rbs.com/about03.asp?id=AB OUT_US/OUR_HERITAGE/OUR_HISTORY/OUR_BANKIN

G_FAMILY/STORY_RBS

http://www.rbs.com/about03.asp?id=AB OUT_US/OUR_HERITAGE/OUR_HISTORY/OUR_BANKIN

G_FAMILY/PRESENT_DAY_CONSTITUENTS

http://www.consortiumbid.com/en/index.html

References


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Q & A


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Thankyou

Documents

HRM Term Project M&a RBS 131107 r1