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Drive the short-term value Exceed the market’s expectations Integrate the Organizations as Seamlessly as Possible Develop and communicate a shared strategic agenda Define organization structures, key business processes and technology platform/architecture Select leaders and staff positions Develop metrics and budgets Integrate the business Integrate day-to-day operations Position for the future growth Achieve Business Value Goals as Quickly as Possible Achieve $200 million of savings within 12-18 months (running rate by 2001) Ensure customer retention Corporate Center rationalization Administrative overhead reduction Sourcing/Procurement savings Product line and operations rationalization Manufacturing productivity and supply chain improvements Reduction in technology costs The focus of the integration was to quickly achieve operational synergies while combining the organizations to support top line revenue growth A.T. Kearney was asked to structure, drive and manage the entire integration process for what would become one of the largest specialty chemical companies Latin America and Asia-Pacific Region Operations: 10% of sales 20 manufacturing facilities 10 distribution sites North American Region Operations 60% of sales 60 manufacturing facilities 230 distribution sites(1) While the potential source of the synergies were somewhat clear, smooth and timely integration of the two companies was less assured Challenges Some manufacturing processes and technologies were incompatible between the two companies Combining two companies with both direct product overlap Acquiring company was more of a “intermediates producer” and the acquired company was more of a “formulator” Significant facilities consolidation opportunities Distribution consolidation and improvement required changing the business model and the mindset Standard lead times Standard service levels Significant customer overlap Significant EHS issues needed to be addressed, competing away scarce capit
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