Service Overview Amid a slowdown in long-term economic growth in the Japanese domestic market, the accelerating trend for the development of global business platform leveraging M&A in a short period of time can also be seen among the Japanese financial institutions targeting fast-growing Asian markets and other large-scale markets including the US financial market. On the other hand, it is not always easy to unlock the potential of acquired local companies for group-wide synergy maximization in the face of various barriers, such as differences in competitive environments and business models of each country, country-specific financial regulations and taxation system, together with gap in languages and cultures. With our global network of experts specializing in the financial industry in157 countries, PricewaterhouseCoopers Co.,Ltd(PwC) is capable of providing assistance for our clients with supports from the initial stage of M&A strategy development to the full-scale post-closing business integration followed by transformation. Client Issues While M&A has become widely known as one of the most important strategies, there are only a limited number of Japanese financial instiutitons that have actually succeeded in post-merger integrations along with the consequent full-scale transformation of organization/process/systems that are indispensable for the realization of the initial purpose of M&A planning. Integration Support for Financial Institutions Do you have any concern regarding cross-border business integration?
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Service Overview
Amid a slowdown in long-term economic growth in the Japanese domestic market, the accelerating trend for
the development of global business platform leveraging M&A in a short period of time can also be seen among
the Japanese financial institutions targeting fast-growing Asian markets and other large-scale markets
including the US financial market. On the other hand, it is not always easy to unlock the potential of acquired
local companies for group-wide synergy maximization in the face of various barriers, such as differences in
competitive environments and business models of each country, country-specific financial regulations and
taxation system, together with gap in languages and cultures. With our global network of experts specializing in
the financial industry in157 countries, PricewaterhouseCoopers Co.,Ltd(PwC) is capable of providing assistance
for our clients with supports from the initial stage of M&A strategy development to the full-scale post-closing
business integration followed by transformation.
Client Issues
While M&A has become widely known as one of the most important strategies, there are only a limited number
of Japanese financial instiutitons that have actually succeeded in post-merger integrations along with the
consequent full-scale transformation of organization/process/systems that are indispensable for the realization
of the initial purpose of M&A planning.
Integration Support for Financial Institutions
Do you have any concern regarding cross-border business integration?
Our Approach
Through the findings from synergy/risk analysis focused on business model/operation process/system, PwC
assists our clients to acquire the value expected at the time of M&A planning in a short period of time and to
promote the transformation for the strategy realization with the development of integration planning from the
pre-close phase and regular tracking of synergy initiatives.
By leveraging tools/templates developed based on PwC’s past integration/transformation experiences, we
provide support for early-establishment of Integration Management Office (IMO)/ Workstreams, strict overall
progress/risk management, visualization of synergy effects, as well as creation of explicit
knowledge/organizational knowledge regarding integration.
Impacts
Case Example 1: Support for cross border business integration utilizing PwC global network
We provided assistance for a major Japanese bank which has made a foreign bank into its full subsidiary for the
business integration. More specifically, we helped this client to design the new bank’s integration business
model for the management of integrated business/operation to solve the issues for achievement of the goal by
providing the supports of PwC members specializing in Finance/Accounting, HR, Risk Management, System,
and Business Administration of the local office.
In Japan and the local country, PwC Japan’s consultants also
supported the client with the agreement formation to enable
appropriate incorporation of the global governance structure
through close coordination with the Integration Management
Office and relevant stakeholders while ensuring the local
autonomy of the new bank. As a result, we could contribute to
stable integration of business as initially planned.
Case example 2: “Transformation Management Office” for promotion of post-acquisition value
enhancement
Our private equity fund (PE) client had a goal of “enhancing business platform to improve EBITDA by 30% in 3
years” regarding an acquired subsidiary. For this endeavour, we worked to identify all findings from due
diligence, cost reduction measures planned by the subsidiary, and recommendation from an external advisor to
define improvement measures for over 60 items upon prioritization and placed the person responsible as well
as the deadline. We also established the Transformation Management Office (TMO) to facilitate the firm-wide
value enhancement initiative and supported the following areas as the TMO members.
•Planning ：Design the improvement measures set by the top-down approach to the field level
•Tracking： Operate the Management Reporting process through the progress measurement with EBITDA
impact amount
•Driving： Provide expert advice for promotion of improvement measures
With the implementation of the value enhancement system mainly around TMO and visualization of the
progress along with the incentive system, our client successfully achieved the financial goal set at the time of
acquisition within 3 year.
Benefits Tracking
Compiling of plan and actual project effects
Consolidation of project effects on programme level
Reporting of results in defined formats
• Reporting of plan and actual project performance
• Bottom-up support of reported effects with measures
• Validation of actual EBITDA effects via actual controlling concepts aligned with available IT systems
• Consolidation of individual project sheets to overall programme master tool
• Allocation of financial impact on legal entity, P&L line and business unit
• Analysis of plan vs. forecast vs. actual deviations per financial effects
• Definition of management presentation format
• Reporting of EBITDA/ cash impact by maturity grade
• Execution status of major initiatives / improvement levers
• Current status, critical issues, and future milestones by lever
Project reporting sheet Measure tracking sheet
PLAN“Top down target setting”
ACT/FC“Bottom up target fill level”
1
2
2007 2008 2009 2010 2011
IPO case
Management plan
EBITA (incl. add-on)
Maturity grades
MG 1
MG 2
MG 3
MG 4
MG 5
Lever 1
Plan YE
Plan month
Actual
120
30
25
Lever 2
Plan YE
Plan month
Actual
150
40
30
Lever 3
Plan YE
Plan month
Actual
80
35
25
FI TI
TP = Total potential FI = Financial Impact TI = Timing
Headwinds Cost reduction
Tariff/
pers.
Price
decay
Cost
reduction
Volume
& mix
2006
EBITA
Material
price
Recurr.
costs
GAP 2011
EBITA
GAP
Brand 1
Brand 2
Brand 3
TP
Execution per lever & maturity grade YTD financial impact per lever
Overall status of the program EBITA bridge incl. gap
ACT PLAN ACT PLAN Bottom-up Top down
FC Target Budget IPO PM Cum.
EBITA
Lever 1
Lever 2
Lever n
Total
CASH
Lever 1
Lever 2
Lever n
Total
2011
MTD YTD Full year Status
FIΔ (Bottom-up) FC
Setup of master reporting tool
Project
sheets
Plan / FC
deviations
Output
analysis
Master file overview
Master
report
…
Project 1
Project saving calculation update
Project 2
Project saving calculation update
Project n
Project saving calculation update
Grosssavings
Recurr.cost
One-timeexpenses
Capex FTE
Master reporting tool
Output analysis for
management reporting
Consolidation
Plan / actual deviation
Originally planned
32
1
4Summary
PlanForecast
Gross savings
Recurring cost
One-time expenses
Capex FTE
Act BD Plan Act BD Plan Act BD Plan Act BD Plan Act BD Plan
Project 1
Project 2
...
Project n
Lever 1
Project 1
Project 2
...
Project n
Lever 2
Lever n
Total
ActualDeviation
Business Cases
Monthly Status Report
Master Initiative Plan
TMO Dashboard
Program Management
Transition Management Office
Biz Strategy Initiative
Distribution Strategy
Human Resources
Manufacturing
Real EstateContract Management
FinanceIT
Procurement MarketingProductDevelopment
Sales
Steering CommitteeXX
TMO XXX
Contacts
Yusuke Aiba +81 80 4073 6938 [email protected]
Akira Hirashima +81 80 4171 9385 [email protected]
Yuichiro Iwakami +81 80 4347 3441 [email protected]
Nic Wilson +81 80 4179 8083 [email protected]
© 2015 PricewaterhouseCoopers Co., Ltd.. All rights reserved. PwC refers to the PwC network member firms and/or their specified subsidiaries in Japan, and may sometimes refer to the PwC network. Each of such firms and subsidiaries is a separate legal entity. Please see www.pwc.com/structure for further details.
This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.
© 2015 PricewaterhouseCoopers Co., Ltd. All rights reserved. PwC refers to the PwC network member firms and/or their specified subsidiaries in Japan, and may sometimes refer to the PwC network. Each of such firms and subsidiaries is a separate legal entity. Please see www.pwc.com/structure for further details.
This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.
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