Unity Bank Case Essay

3412 Words Jun 13th, 2011 14 Pages
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UNITY BANK: REALIZING VALUE FROM AN M&A INTEGRATION

EXECUTIVE SUMMARY:

Founded in 1982 in South Africa, Unity Bank was one of the few providers of global shareholder and employee management services and other value added services. Unity held more than 60 million accounts for over 10,000 corporations across twelve countries and five continents, employing 8000 people worldwide and a market capitalization of $2 billion. The M&A integration of Delta with Unity Bank in itself was a great step for Unity Bank.

The four major areas to be considered during the integration were software, infrastructure, organization structure, and people. The team’s task was challenging as it had called for a $60 million saving in two years, nearly
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Establish tiered savings program
Set more obtainable goals to meet the board’s expectation. Set half-year goals with what can realistic be accomplished and reduce staff as you finish sections of the integration. After each system is upgraded or integrated into another, eliminate all non-essential staff.
Disadvantages:
• May not solve the time constraint issue • Creates artificial deadlines which might add more pressure

C. Eliminate short-term saving goal
To maximize shareholder value in the long term and to protect the very existence of Unity Bank, eliminate any constraints on having nothing less than a perfect smooth integration with Delta. Without the fear of immediate termination, Delta employees may be more willing to cooperate. Savings will eventual be met and more likely exceed the projected $60 million.
Disadvantages:
• This means greater expense for the company. • Decreases profits from shareholders in the short run.

2. Inability to prioritize critical factors for integration
Delta is one the biggest acquisitions for Unity and the integration process requires well-planned strategies. The four major areas of integration are software, infrastructure, organizational structure, and personnel. Deciding the order in which to tackle the four areas is challenging since Unity has never merged with such a large company and there is no statistical model from which the team can work.

Alternatives:

A. Hire an outside consultant to

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