Asian Mergers and Acquisitions

Vikram Chakravarty is a Partner with A.T. Kearney′s Singapore office and heads the strategy and corporate finance practice in Asia. He has more than fifteen years of consulting experience and has advised leading corporations across the world in strategy and competitiveness issues. Vikram has led or been involved in more than sixty projects in private equity, commodities, energy, industrials, consumer products, logistics, and financial industries. Prior to A.T. Kearney, he was the Asia Pacific head of strategy for Stern Stewart and, prior to that, Monitor′s regional director of strategy and competitiveness. Chua Soon Ghee is a Partner with A.T. Kearney′s Singapore office and a core practitioner in both the firm′s strategy practice and its communications, media, and high–tech practice. He has more than fourteen years of consulting and industry experience working with clients across Asia, with a primary focus on helping global and Asian corporations develop successful growth strategies and offering advice on how to operate more efficient organizations. Soon Ghee also has deep industry experience in auto– motive, transportation and logistics, and agriculture.

Foreword ix
Preface xi


Acknowledgments xiii


Chapter 1: Asia Rewrites the M&A Rules 1


Deal Activity Is on the Rise in an Ascendant Asia 2


Natural Progression in M&A, the Asian Way 5


Tomorrow s Winners Are Moving Fast, Today 8


Chapter 2: Asian Companies Are Poised to Triumph in the Merger Endgame 11


The Drive Toward Consolidation 12


Asia s Fragmented Markets Create Opportunity 15


Asian Players Will Drive Local Optima 16


Consolidation Looms for Asia s Nascent Retail Sector 16


The Tale of Two Soft Drink Markets: Why Local Optima Will Emerge 21


Henan Brouhaha Heralds Beer Consolidation Drive 23


Banking and Telecom Sectors Dominated by Asian Champions 25


The Exceptions: Some Industries Likely to Be Dominated by Global Players While Others Resist Consolidation 26


Acknowledgments 29


Chapter 3: The Rise and Rise of Cross–Border M&A 31


The Numbers Point East 34


The Drivers behind Asia s Cross–Border M&A Boom 37


The Risks Inherent in M&A Are More Pronounced in Asia 50


Acknowledgments 52


Chapter 4: Transforming Government–Linked


Companies through Mergers and Acquisitions 53


The Role of the Public Sector in Key Asian Economies 54


M&A: A Tool That Makes Both Companies and Economies More Competitive 56


The Emerging Threat from the Private Sector 59


Meeting the Challenges 60


A Better Way to Achieve Transformation 67


Acknowledgments 68


Chapter 5: Getting It Right Before You Begin 69


Step 1: A Framework Helps Forward Planning 71


Step 2: Methodical Tracking and Screening Underpin Successful M&A 75


Step 3: Choose Your Model: Classic M&A versus the Acquisition Factory 76


Step 4: Surround Yourself with Experts 83


Plan Early, Think Small: The Risk–Averse Route to Success 86


Acknowledgments 87


Chapter 6: Due Diligence 89


Risk Is on the Rise 90


Follow the Leaders, Learn from the Failures 91


Bridging the Due Diligence Gap 92


Due Diligence: The Classic Approach 94


Operations Due Diligence 95


The 100–Day Plan: A Road Map to Success 101


Jump–Starting the Clean Room 104


Acknowledgments 106


Chapter 7: A Guide to Successful Post–Merger Integration 107


Merger Integration Overview: The Key Pillars of a Solid Post–Merger Plan 109


Merger Management: The Keys to Success 116


Synergy Value Capture: How to Get It Right 122


Merger Enablement: The Glue That Holds It All Together 127


Acknowledgments 135


Chapter 8: Culture Matters 137


It s Not a Small World, After All 138


National Culture and Communication: What the Interpreter Won t Tell You 142


Corporate Culture Matters: Making Mixed Marriages Work 145


Expect the Unexpected: Local Business Culture and Norms Can Be Costly and Surprising 147


How to Bridge the Culture Gap 148


It s Not as Hard as It Seems 159


Acknowledgments 160


Chapter 9: Conclusion 161


Now Is the Time to Go on the Offensive 162


M&A the Asian Way 162


The Key to Success: Planning Ahead 164


Think Globally, Act Globally 165


Appendix: PMI Tools 167


Prepare for and Execute a Perfect Day One 167


Launch Integration Structure and Project Teams 169


Launch Benefits Tracking and Reporting (BTR) Process 173


Launch Risk Management Process 178


Launch Change Management and Communications Processes 181


Notes 189


About the Authors 195


Index 197