Case study 4

Enabling a merger

Two quoted companies operating in a regulated industry faced similar problems. Each had an impressive track record but limited opportunities for growth, and shareholders would not support diversification. Should they merge? The chief executives of the two companies sought Nigel's help.

Nigel warned that merger discussions were fraught with difficulty, and risked damaging rumours reaching the market. He recommended postponing the involvement of professional advisors until the two chief executives had addressed key issues face-to-face. In the next eight weeks Nigel chaired 15 secret meetings at which:

  • The CEO’s described their personal and corporate objectives
  • Trust was built by disclosure and frank discussion
  • Differences of opinion were overcome by compromise
  • Sensitive board and organisational changes were agreed quickly
  • Joint management teams met to identify strategic opportunities, agree financial parameters and resolve operational problems
  • Issues needing specialist technical or regulatory advice were set aside for later attention

These meetings established powerful commercial arguments for a merger, removed major obstacles in the way and built strong relationships between the two management teams. Nigel produced an agreed summary of the final position for presentation and approval by both boards, and briefed the professional advisors on what was needed to progress the merger.