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Case Study

Integrate or partner? An M&A analysis from the acquiree’s point of view

By Carlos Cordon, Giorgio Carlo Brambilla and Marta Xiangjin Cao

17 pages

February 2022

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Reference: IMD-7-2332

Avaloq, headquartered in Switzerland, is a market leader in global digital banking. It was acquired by the leading Japanese IT conglomerate NEC Corporation at the end of 2020, despite COVID-19 pandemic challenges faced during the sale process. The aim of the M&A was to strengthen NEC’s cloud software services in digital finance and government, essential pillars for its smart cities strategy. The case explores the M&A process from the acquiree’s viewpoint. Avaloq’s leadership team were debating which post-merger integration structure to propose to NEC: full merger, partnering or a hybrid approach? To help the protagonist solve this dilemma, the following perspectives and their strategic alignment are analyzed in depth, giving valuable insights into the integration direction: Organizational business models identifying M&A synergies; joint value-creation strategies and integration design ensuring the resulting M&A value is greater than the sum of its parts; industry drivers promoting vertical or horizontal integration; and the role of management/employee preferences in relation to M&A direction within the broader perspective of managing cross-cultural differences.

Learning Objective

Identify M&A synergies and organizational design using the Business Model Canvas.
Assess industry forces via the double helix framework (vertical vs. horizontal integration).
Understand how culture, leadership and human factors impact M&A integration design.
Devise the best strategy to maximize and realize value creation.

Keywords

Digital Banking, Merger and Acquisition Strategy, Strategy, Leadership, Innovation, Smart City, Global, Local, Information Technology, Financial Technology, Entrepreneurship, Culture, Sustainability, Industry Infrastructure, Industry Innovation, Organizational Culture

Settings

Avaloq, Finance and Insurance, Financial Services, Finance and Insurance, Banking, Information Technology
2017-2021

Type

Field Research

Available Languages

English

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