While bank mergers may exacerbate the rising jobless rate, consolidation is a long-term positive factor for the sector, Tim Galpin, merger and acquisitions expert at consulting firm Watson Wyatt Worldwide, said yesterday.
"Mergers may raise the jobless rate in the short term, but it makes the industries more competitive in the long run," Galpin said yesterday, when asked about how corporate restructuring may add to the nation's rising unemployment ratio.
But mergers for the sake of mergers may not help, as recent international experience suggests most corporate marriages fail, Galpin said. Cultural differences are the key cause, he said, adding that most top executives ignore the cultural factors. "When it comes to the culture, they are either confused or scared," he said.
PHOTO: WATSON WYATT WORLDWIDE
Communication is also important, as any lack of interaction with employees will lead to lower productivity, with staff unable to concentrate on their jobs. Therefore, corporations mulling mergers should speed up the time of integration between the merged companies so as to avoid hurting productivity -- and hence profitability.
"It is similar to pulling off a band-aid: You can do it fast and painful or slow and painful, but there is still going to be pain," Galpin said. "So you might as well do it faster and get the pain over with fast."
Worse still, a slow integration process and lack of communication with staff may trigger the departure of key people from the company.
"Your best people will leave first because they can find jobs fast, and when they walk out of the door, the value walks out of the door," Galpin said.
Some companies, while trying to retain top-level executives, forget about middle management, he said. The strategy on how to retain the best talent should be based upon the nature of the company's business, he said.
While the firm's staff may know about the development of the deal, outsiders may rely on certain indicators to see if the deal is going well. Undesired turnover is one bad sign, he said.
"When you see people bailing out of a company, that is a very important indication that the deal is not going too well," he said.
As an example, Galpin said that top employees left Nation's Bank and Bank of America within two months after a merger between the two banks was announced. Two other major mergers -- Citicorp-Travelers and Daimler-Chrysler -- also experienced a similar bleeding of key staff, he said. One part of a company most likely to suffer after the departure of key employees is customer service.
"If customer service is bad, no matter what business sector we are talking about, and people are making excuses, then it is a clear indication that things are not going well," he said.
One model that may be emulated by other companies are mergers that have occurred with General Electric. The company has placed huge emphasis on integration by appointing internal specialists to help integrate companies and also relying on local talent to spur mergers, he said.
With the speed cryptocurrency is emerging as the millennial generation’s alternative asset of choice in India, it is hard to imagine that just two years ago a couple of blockchain pioneers were briefly in police custody. Sathvik Vishwanath and Harish BV, cofounders of a then five-year-old start-up, were arrested in late 2018. No, they had not pulled off a shady initial coin offering. Their “crime” was that they put up a kiosk in a mall in Bangalore where customers could swap bitcoin, ether or ripple for cash or vice versa. That was the whole point of unocoin, their crypto token exchange.
FIVE NEW FABS: An acquisition of Siltronic would boost GlobalWafers’ market share from 17 to 30 percent, easily surpassing Japanese rival Sumco’s 25 percent GlobalWafers Inc (環球晶圓) yesterday said it is in final talks to acquire Germany-based Siltronic AG in a 3.75 billion euro (US$4.5 billion) deal, which might help it compete with its closest rival Sumco Corp of Japan. The acquisition would be the fifth for GlobalWafers since 2008, as it has grown to become the world’s No. 3 supplier of silicon wafers through such deals. GlobalWafers, which has a 17 percent market share, would see its market position greatly elevated to 30 percent when combined with Siltronic’s 13 percent, according to a presentation Siltronic gave to its investors at a quarterly conference in August. Sumco
A Chinese factory owned by South Korean semiconductor giant SK Hynix Inc yesterday halted operations after a plant worker was found to have an asymptomatic infection of COVID-19, Xinhua news agency reported. The South Korean worker based at the plant in Chongqing since February had departed on Thursday for South Korea, Xinhua reported. He was tested at Incheon Airport in Seoul and confirmed positive for COVID-19 on Saturday, it reported. All factory staff as well as staff and recent guests at the hotel where the worker lived have been isolated and given nucleic acid tests, the agency said. “We’re cooperating with the local government
CONCERNS: The bank would act if it noticed currency speculation, the governor said, but he did not comment on a likely trajectory of the NT dollar against the greenback The central bank would intervene in the market whenever necessary to help stabilize the New Taiwan dollar, central bank Governor Yang Chin-long (楊金龍) said yesterday, adding that it is concerned Taiwan might be placed on the US watchlist for currency manipulation. The Control Yuan recently sent letter inquiring about the central bank’s market regulation efforts, Yang told a meeting of the legislature’s Finance Committee on the NT dollar’s appreciation and property price hikes. “It is the central bank’s top responsibility to stabilize foreign exchanges,” he said. The central bank has often stepped in toward the end of trading sessions to moderate the NT