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Unit 12: HRM in Cross-border Mergers and Acquisitions

initiatives, where communication played a key role, followed by effective action. It is Notes
now implementing systems and processes to make these operating as efficient as any
world class entity. Asian Paints has implemented ERP across its units to make the
transaction process more robust. It has flown in people on special assignments, wherever
any unit had any concern area, be it pertaining to supply chain, marketing or any other
function. It has recently rolled out a mega operational efficiency initiative which focuses
on issues like productivity, safety, environment, reducing factory level losses, planning
and control systems, thus adding value to its acquired operations.
Questions

1. How did Asian Paints handle cultural issues in the acquired companies? What are its
essential learnings from the acquisitions?
2. What steps did Asian Paints take in the process of integration following the
acquisitions?
3. How did Asian Paints accomplish the process of clearing apprehensions about its
acquisitions?
Source: Business Today, 3-12-2006.

12.6 Summary

 Mergers and acquisitions are the market strategies adopted by the companies to enter the
foreign markets.
 M&A deals help the companies to develop a global foothold.

 Acquisitions also give size and a readymade platform to scale up the operations for the
firms.
 Tata is the best example among the Indian companies to perform a large number of cross-
border deals and establish a global footing.
 In the cross border deals, HR plays a major role in making the success of such deals.
 Cultural differences add to the difficulty in M&A deals.

 M&A’s are the intensive activities that require the involvement of HR since the beginning.
 The key areas for the HR involvement are effective communication, cultural alignment,
and change management plan, developing the staff model and developing the reward
strategy for the new organisation.

12.7 Keywords

Acquisition: It is the buying of one company (the ‘target’) by another.
Co-generic: It is the merger taking place in the same industry and at the same economic level.

Concentric Mergers: It is a where two merging firms are in the same general industry, but they
have no mutual buyer/customer or supplier relationship.
Conglomerate: It is the merger between the unrelated business or two companies that have no
common business areas.
Consolidation Mergers: With this merger, a brand new company is formed and both companies
are bought and combined under the new entity. The tax terms are the same as those of a purchase
merger.

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