Ref: IMD-7-2332

Case study

Reference: IMD-7-2332

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Integrate or Partner?: An M&A Analysis from the Acquiree's Point of View

Carlos Cordon

By Professor Carlos CordonCarlos Cordon, Giorgio Carlo Brambilla and Marta Xiangjin Cao

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.

Settings Japan, Switzerland
Avaloq
2017-2021
Type Field Research
Copyright ©2022
Language English
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Reference: IMD-7-2332

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