Analyst’s introduction to post-merger integration in telecommunications

The Change Management challenge “Cultural & people issues present the biggest specific challenges during the post deal period…” Only 20% of respondents were very well prepared to deal with cultures differences Cultural challenges Differences in working styles, leadership approach National culture differences Behavioural differences People Issues Key members of management team leaving Employee moral and motivation Retention of key staff Consultation with staff and representative bodies Top post deal challenges Source: KPMG Global M&A survey 2005 …yet two thirds of companies had not placed a great deal of emphasis on addressing people and cultural issues in planning for the post deal period

ABCinc’s change management approach 9 out of 10 barriers to change are people related In all M&A activities – ABCinc consider how we will identify and manage the human impacts of change in order to deliver the business goals and strategy. Our change programmes are distinct from, but linked to, the more technical HR elements of M&A such as benefit and job alignments. We address both the day 1 issues (systems access, tools etc) and the longer term integration needs of employees. Typically our change programmes address: Change definition (what, why, when, how) Change leadership style & capability of ABCinc & the target company Culture, behaviour & climate Communications & engagement Relationship / stakeholder management Organisational structures Skills & capabilities Business impacts Change management focus Strategy & Business Plan Technical impacts People impacts

M&A Integration Practice (M&AIP) – our role The M&AIP is the CoE for integration capability, methodology and skills: with an overall priority for the successful delivery of integration projects determining overall integration strategy, methods and approach. engaging in the pre-transaction deal team - integration due diligence, business case refinement, planning and preparation engaging and developing the wider integration community in GS, and wider e.g. ABCinc Retail, ABCinc Design providing Integration Directors team for the integration projects for each acquisition. Transferring integration skills to wider ABCinc community (i.e. Comsat) Live Projects: 80% Post OC engagement Focus on integration elements of business case Integration DD, BC assumptions and application of historic learning Ensure increased integration planning and preparation - validation of synergies, integration budget and cost inputs, pre closure communications, change management, integration resource in place and ready. Blueprint philosophy ID tasked with delivery Close monitoring/support in first 12 months Ongoing assessment audits of integration project After 12 months quarterly reviews till close Key driver is achievement of acquisition business case goals Support project team Risk/mitigation strategies Establish and develop the virtual M&A community within ABCinc Ensure Integration expertise and experience I harnessed for continuous improvement Identify new integration directors and programme managers Maintain resource and skill list for rapid deployment across projects and repeatability benefits Thought leadership of M&A integration Promote our capabilities to internal/external audiences, supporting ABCinc strategic themes Standardised methodology – version controlled robust approach Consistent and repeatable Adaptable to varying business requirements but within common structure Minimise risks of diverse approaches to future projects Invest our substantial earning Central set of integration tools and templates Reporting and governance Fasttrack to project readiness Pre-transaction Post-Merger Integration (PMI) M&A Skills & Community Method and skills: 20% Time/resource Allocation

Integration Workshops timeline (during Pre-transaction) A-Day Day-1 Day-1 + 12 months (e.g.) ABCinc Kick-off Workshop Between A-Day and Day-1 Joint Integration Kick-off Workshop As soon as possible after Day-1 Synergy Validation Workshop 2-3 weeks after the Joint Integration Agreement Workshop Full Team Rolling Review 2-3 weeks after the Synergy Validation Workshop Prioritisation Workshop Workstream Rolling Review Joint Integration Agreement Workshop 2-3 weeks after the Joint Integration Kick-off Workshop Pre-transaction Integration Transition BaU

Programme information flow Assumptions Objectives Projects Owner Risks HLMP Milestones Dependencies Resources Project Budget PSG Reports Synergy Tracking Charters PDD’s Blueprint Checkpoint HLMP Update Action Register Issue & Risk Rationale Vision Integration Structure Etc. PSG

The Integration − contents & flow Programme Steering Group (PSG) Workstream Rolling Review Action Register Issues & Risks Register Brochure Blueprint Integration Process Matrix Impact Synergy Tracking & Reporting Leadership Synergy Validation Workshop Motivation, Team Building & Recognition Document Register First 30 Days and ongoing …. Next 70 Days & ongoing …. Last 100 Days Joint Integration Kick-off Workshop Integration Workshops Timeline Other Useful Information Governance Programme Reporting Timeline Checkpoint Joint Integration Agreement Workshop Focus during the first 100 Days Quick Wins Full Team Rolling The Softer Integration Requirements Integration Communications Prioritisation Workshop Re-branding Culture HLMP (High Level Milestone Plan) Change Management Hygiene Factors for Day-1 Integration Practice Reviews Formal Handover to the Integration Team Integration Blueprint The last 100 days OUC’s and Finance Transition

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