Section five, which concluded our web conference, was entitled “Mergers and Acquisitions reinvents itself” with the subtitle “the transformation of the most complex project type for companies“.
This brought us back to the innermost core of the BM&A mission, whose objectives, methodologies and roles in corporate restructuring are changing with a dynamism and diversity never before seen in the history of our association.
This topic has once again necessarily become a central focus of the association’s work. We had already held a series of individual short events on this topic. Immediately before our Transformation Day, two further major events took place in which the Bundesverband Mergers & Acquisitions e.V. participated in leading roles. These were the rethink M&A conference on September 27 in Frankfurt-Gravenbruch and the reorganized Corporate M&A Congress, which took place this year on October 4 at Messe Frankfurt. BM&A was involved in both conferences in the introduction and with the most important contributions on the renewal of mergers and acquisitions. In order not to repeat ourselves in terms of content, we positioned our contributions differently, each with a different content focus and different types of presentation, i.e. presentations, discussion panels and teams for the further development of M&A.
For this reason, we chose a presentation and content approach for the Corporate Transformation Day that was very different from the events that had taken place recently. This was reflected in our program as follows:
We did not repeat our presentation of the various process models for managing merger projects with the changes that have arisen as a result of new conditions. Instead, we concentrate on the core messages that we were able to work out and develop in the previous workshops and conferences.
One of the key messages was the realization that innovations in merger projects are very much driven by digital business models and much less by private equity than previously assumed. Accordingly, the introductory presentation was entitled “Digital business models as a driver for M&A”.This was presented by Jens Weber, Partner at EY-Parthenon and a long-time combatant of BM&A.
Among other things, Weber discussed the use of artificial intelligence in M&A tools and processes. In his opinion, the factual role attributed to AI in M&A is significantly overestimated. Practice shows that procedures are derived much more from operational experience. These are reflected, for example, in “digital blueprints”, i.e. digitally backed building blocks derived from the experience of previous projects. However, the use of such blueprints alone cannot fulfill expectations for specific results. In this respect, management experience is still crucial, and knowledge of the latest developments in digital business models is a prerequisite.
Today, as in the past, the main objective of a transaction is to increase value. The transformations required to achieve this should primarily focus on the realization of long-term, high-level goals and less on the typical short-term potential for improvement, which is usually of a marginal nature. The digitalization of companies is essentially driven by the strategy departments. Compared to the Anglo-American region, however, Germany is lagging behind.
The second presentation in section 5 was given by Michael Scheibner, Chief Strategy Officer at GK Software SE. The title of his presentation was “M&A in the digital environment – a practical report from the retail sector“.
Scheibner emphasized the statement that it is not the AI team that shapes the new M&A, but rather the culture of the driver in the respective M&A case: “Strategy for Breakfast”.
In these times of advancing cyber attacks on M&A, security guidelines of the M&A operating company must be enforced. In other words: clean up! This includes careful documentation. Above all, gatekeepers play a role in ensuring that the teams cannot be undermined.
Duo-lingual language barriers must be overcome. Merging with start-ups requires specific integration models, such as inverse integration, as start-ups can operate much faster and much leaner. However, it also makes sense to leave existing structures as they are and merge them later.
The final presentation in section 5 was given by Michael Timmermann, Managing Director of Timmermann und Partners, entitled “The rediscovery of people in M&A”.
We had explicitly chosen this topic based on the observation that a great deal of attention is currently being paid to the digitalization of M&A, although the performance of merger projects has not improved at all. One of the reasons for the stagnation at a low performance level is that the requirements for projects to merge parts of companies have become ever more demanding in recent years, for example due to increasingly heterogeneous partnerships and thus greater cultural differences that arise between different regions, different business approaches and differences in size between the partners.
To bridge these gaps, the human factor continues to play the decisive role in integration. As integration is becoming increasingly challenging and ambitious due to the aforementioned factors, even more investment needs to be made in the human factor.
So the factors from the technical side – especially digitalization – and the human-cultural side play a decisive role in today’s and future M&A. These two sides could also be seen as antagonists, but better as synergetic drivers of the new M& A.
Within this framework, Michael Timmermann presented his concept of services to be provided in the course of human-cultural integration. Timmermann works with his clients to develop “truly transformational, i.e. long-term and development-oriented partnerships”. The consulting services are: Strategy implementation, agile transformation, top team development, diagnostics, cultural development, specialist consulting and M&A change support.
For discussion:
The concluding expert discussion on the topic of “Digitalization versus cultural management” took place among the speakers and included the moderator Kai Lucks. The influencing factors, directional decisions and solution approaches mentioned in the presentations were confirmed once again. It was also reiterated that we are currently undergoing a comprehensive transformation of the M&A process.
We see the formation of a working group for the further development of M&A as a possible next step, in which, for example, tools and approaches for the digitalization of M&A are presented and discussed as they are “for sale” on the internet or with service providers. This would make it possible to assess the quality of offers and make these results available to a broader community. Careful examination of the digital consulting products offered on the Internet has shown that there are enormous differences in quality. Many products are immature and are just waiting for customers to provide funds in order to purchase the advisory services based on them. In doing so, they may be paying three times over, firstly for the consultancy fee, secondly for the development costs that the consultant should actually spend in advance to sell their products and thirdly by the client training the consulting company’s staff in their project and thus transferring the shared knowledge to an external party instead of keeping it within the company by training their own M&A staff.
You can watch the recording of this part of the event and all other topics here on the BM&A YouTube channel.
