MERGER OF UBS (UNION BANK

OF SWITZERLAND) – SBC (SWISS BANK

CORPORATION): INTEGRATION PLANNING
Merger & Acquisitions Group Assignment

Group A12

Isha Varma – 16F323

Chandni M – 16F312

Ashna Kedia – 16F311

Gandhali Inamdar – 16F317

Q1. Critique the integration strategy of the two banks. Be sure to use the financial data
while you critique.
 The basic agenda was to finish up with the integration process quickly, i.e. to have
integration time as short as possible, and eliminate duplication
 Each business area had integration teams, and each of the team were to finish their plans
by May, 1, i.e. not prolonging the life of integration teams
 Both the companies had formed a common vision statement, which contained very clear
business and financial targets and this were communicated throughout the organization via
a memo. Distribution of integration developments to employees through a joint website,
helped in building commitment to the new organization. Involving employees also helped
in solving any disputes at any level
 Communication is crucial to successful integration – only approved by 43%. Therefore,
main reason that communication was said to be ineffective by 57% was inadequate
resources, slow process, inconsistency of messages etc. Therefore, the company should
have focused on building on these resources rather than stating communication to be
ineffective. Building up these resources would have helped in successful integration.
 Considering integration management team to be separate and distinct, i.e. a special project
would have helped the organization achieve its goal faster due finite number of goals.
 Although the integration strategy adopted by the companies would result in opportunities
for synergistic cost savings, but it would also result in significant layoffs. For example, the
new company had laid off 7,000 people in Switzerland between 1998 and 2002.
 But these layoffs were shown as early retirement rather than terminations, therefore this
came in positive light for the company
 There was not much emphasis on risk assessment and due diligence
 The company gave the required time needed to develop a new culture, and also allowed for
release of those employees who cannot culturally adjust.

Q2. What are the ‘me’ issues in integrating in the UBS-SBC case.
Given the business environment both the companies were in with tight labour market, premium
demanded by dissatisfied employees and impending Y2K problem; both the companies were
under pressure to speed up the integration process.
A report by A.T. Kearney on merger processes noted that the success or failure of a merger can
be observed in first 100 days.

 Urgency created by “me” issues

 Meaning- Ground level impact of merger on every aspect of individual employee’s
job status
 Potential to create fear and panic amongst employees if not addressed timely
 Impacts all aspects of job- employment status, compensation, benefits,
performance, projects, skills etc.
 Hence, communication, credibility, and continuum in processes is required for
implementation of merger
 Impact of “me” issues on organization
  Could cause organizational paralysis in work, project timelines, cultural
disharmony etc.
 Threats to decision makers
 Could lead to loss of critical talent, or demand of premium for staying back
 Retention decisions, layoff management, exit processes all impact the culture of
organization
 Handling of lay-offs
 The merger transition team was sensitive to social responsibility during tough lay-
off decisions
 Early retirement options were offered wherever possible over termination. This
reduced the negativity
 Communication of policies/decisions
 All organizational changes & policies were communicated in a timely manner
 This reduced the uncertainty and dampened the negative impact of “me” issues