In the Hot Seat

Meet the banking CFO who says the subprime crisis would be easy to handle — if only he didn't have to oversee the integration of a €24 billion takeover.

Mittler also describes as straightforward an April meeting in London at which the three CFOs — Mittler, RBS’s Guy Whittaker and Santander’s José Antonio Alvarez — settled on the valuation of ABN’s assets. Even when ABN pushed through the sale of LaSalle a few months later, the consortium agreed to forge ahead with the offer after a quick conference call. “All the energy was kept for two things,” Mittler says. “Fighting to get the deal done and working on the separation and integration from that date.”

Despite the scale of the acquisition — ABN was a sprawling business with €17 billion in income and more than 100,000 employees — much of this is familiar territory for each of the consortium’s members. Between them, they have acquired more than 100 companies over the past 15 years, including RBS’s purchase of NatWest in 2000 and Santander’s acquisition of Abbey National in 2004. Fortis has made more than 25 deals in the past three years alone. Again, Mittler admits that convincing the market of the validity of its integration was easy. “They believed us because we’d done it before.”

Experience does count. “Active acquirers have a better record of post-merger integration than a very infrequent, episodic or first-time acquirer,” says Robert Bruner, a professor at the University of Virginia’s Darden School of Business and the author of Deals from Hell (Wiley, 2005). “It’s a learned skill, a set of competencies that you build up with every new deal.” Mittler’s favourite example from his bank’s track record dates back to 1998, when it integrated seven Benelux banks acquired in previous years, including Belgium’s Générale de Banque. The board targeted synergies of €675m from the Générale de Banque deal, and improved that figure by nearly 30%, the CFO says, although over four years, rather than the initially anticipated three.

Analysts agree that Fortis’s track record makes it well placed to succeed with ABN. Last year, WestLB analyst Ralf Breuer told The Financial Times, “If someone needs a lesson in integrating businesses, Fortis would be one of my major examples on how to manage it, and be financially successfully at it as well.”

But there’s a lot to digest. In bringing ABN’s assets under its umbrella, Fortis has become the third-largest private bank in Europe, and a market leader in financial services in the Benelux. ABN also significantly boosts its global capabilities in asset management and bancassurance. The enlarged group now has more than 10m retail banking clients, up from 6m; 900 more retail branches, bringing the total to 2,500; and 145 business centres across the continent, compared with 116 previously. If the ABN deal delivers, it will be a coup for its chief executive, Jean-Paul Votron, who outlined a growth strategy centred on European expansion in his first meeting with analysts as CEO in 2005.

From Finance to Fluffy Stuff

A Belgian whose career has been shaped by Fortis’s transactions, Mittler was already a company veteran by the time Votron arrived at the bank. When the group was formed by a three-way, Belgian-Dutch merger in 1990, Mittler moved from one of the businesses — Belgian insurer Group AG — to become finance director of the combined group. He later took director roles in several acquired companies until the late 1990s, when the group integrated its banks under the Fortis brand. In 2001 he was appointed CFO and joined Fortis’s executive committee.


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