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.

Today, Mittler’s approach to post-deal management could be called relaxed — focus on one task at a time, and even the biggest deal is easy to handle. “Integration is a big word for a large number of small projects,” he says.

In the case of ABN, the integration projects started early. The process was helped along, says Mittler, by the fact that Fortis had a lot of background knowledge on ABN, having already sat across the dealmaking table from each other. In 1997, Fortis bought MeesPierson, a private-banking subsidiary of ABN, and a year later won a bidding war against ABN for Générale de Banque. So despite the size of the deal, Mittler says ABN’s integration should go more smoothly than some smaller takeovers he has handled in less familiar markets such as Turkey and Poland. In those cases, getting to grips with a new business during due diligence often pushed post-deal planning down the list of priorities. That’s not the case with ABN.

And like CFOs of other major M&A deals, Mittler will be thinking about more than just the numbers. According to Marco Boschetti, a principal at HR consultancy Towers Perrin, alongside the traditional focus on risk and cost management, acquisitive finance executives need to target areas outside their traditional remit — notably, making sure the company retains key staff after a deal is done. “Employee engagement is the kind of soft and fluffy stuff that you’d imagine a CFO wouldn’t care about,” Boschetti says. But all CFOs should.

In the case of Fortis’s senior management, staffing and cultural issues are big concerns. “Some mergers and acquisitions fail because of a lack of cultural sensitivity,” wrote Votron in the bank’s 2007 annual report. “That’s a fatal mistake we are determined not to make.” To that end, Mittler and Votron have hit the road, meeting with employees as part of a programme designed to keep staff informed about the integration’s progress.

Mission Impossible?

The centrepiece of Mittler’s communications with both staff and investors is the clear timetable of post-deal events. Many decisions have already been taken. Even in the case of an ABN business unit not becoming part of Fortis until the end of next year, the board has agreed on a management team and made other choices about personnel and how key posts will be filled.

IT — another critical area in M&A integration — is also covered. Each division has had to decide to use either ABN’s or Fortis’s IT system rather than cherry-picking parts of each to form a new system. (In a nonchalant aside sure to endear him to IT officers everywhere, Mittler says, “it’s not a big bang. It’s a migration. That’s easy — CIOs do that each year a number of times.”) Yet more decisions on aspects such as product lines, branding and operating models have also been made.

As for his own department, Mittler has about 100 members of the finance team working on the integration. It’s been a heavy workload, he admits, but he’s sure his colleagues have relished the challenges of working on “one of the biggest acquisitions, largest financings and very complex integrations in the industry.” In terms of divvying up newly acquired staff, some ABN teams have been assigned to consortium members, while other employees were given access to a central job market where vacancies at RBS, Fortis and Santander are posted.

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