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Global HRM

Notes  Understand all the legal cases pending with the acquiring company and take full
accreditation of the cases to take next steps.

 Proper retrenchment policy to be implemented for excess staff.
Self Assessment

State whether the following statements are true or false:
15. Post-M&A performance is measured by synergy realisation, relative performance
(compared to competition), and absolute performance.

16. HR should encourage the new company’s leaders to provide strict punishment to the ones
that do not support the new culture.



Case Study Asian Paints: Acquisition

n the case of Asian Paints, with 51% acquisition of Singapore Company Berger
International in 2002, Vice Chairman and MD Dani says he was clear that his company
Iwill be choosy in its operations and not necessarily operate all the ten subsidiaries of
Berger. In the four years since the acquisition, Asian Paints has sold three subsidiaries (in
Malta, Philippines and Myanmar), Dani’s motive is clear: to be present only in emerging
markets and in markets that generate cash flows. “Surely, cultural issues play an important
role in an acquisition. To handle this carefully, we spent time with the employees and
worked as a team to thrash out the synergies such that the acquisition generates value”,
says Dani.

Critical size helps you spread your fixed cost. At the same time, one must always be
prepared for making course corrections on the way. We exited out of our ventures in
Martius and Malta because after operating for while, we found out that the growth of the
paint market as well as the economy was stagnating. So, we took our call and I feel
companies should always be prepared to make such decisions: but what counts in today’s
age is the speed of integration, opines Dani.
One of the most essential learning from the acquisitions was realising the importance of
local knowledge. When the companies went abroad they realised that it was a whole new
ball game; the market dynamics were all together different. They have to align their
products and customer offerings to cater to each individual market. Along with local
understanding, comes the core issue of localisation of talent and the need to develop a
strong local cadre. A local workforce brings with it a better understanding of the market,
operating environment and consumer preferences. The greatest challenge for Indian MNCs
lies in the area of attracting and acquiring local talent for their overseas ventures. As
Indian companies globalise, they have to acquire size and market share to stay afloat.

The process of integration follows an acquisition, but what counts in today’s age is the
speed of integration and how fast you are able to share organisational best practices
within different units. Along with technology and intellectual integration, emotional
integration is also critical, because in the end, one need to realise that while there are
brands, there are also customers and there are employees.
Take for example Asian Paints. For its international operations, Asian Paints accomplished
the process of clearing apprehensions about acquisitions through its various connect
Contd...

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