Merger integration activities are in full swing in a least two (three if you count Oracle and Sun) places this month. Company watchers in financial services and biotech / pharma will be able to see first hand in the next year how skillful acquirers BlackRock (acquirer of San Francisco-headquartered Barclays Global Investors aka BGI) and Roche (acquirer of biotech granddaddy Genentech) are at retaining key talent and deriving sustained value from their purchases.
I had a chance to visit BGI this past week and saw first hand any number of long, sad faces. Notices to employees regarding new positions with BlackRock, or alternately, severance offerings, apparently are out (and on announced schedule) and people were likely taking the time to finally and fully soak in the change. The deal for BlackRock is scheduled to close any day now.
My hunch is that the BlackRock acquisition will be good for the BGI employees who are still left.
The Barclays PLC acquisition of Wells Fargo Nikko Investment Advisors (aka WFNIA) – the predecessor company to BGI – felt from a distance as an odd and incomplete acquisition. Well-done integrations [Disclosure: I worked with BGI from 2004-2006, and have over 20 years experience doing organizational integration work] come out on the back side with an organization that is aligned, integrated, and focused on one company, with clear, consistent organizational processes and one culture aligned with the goals of the firm.
The WFNIA to BGI integration had all the aspects of a bolt-on, not a built-in organization (multiple cultures, multiple ways of doing the same process, etc.).
In addition the culture that the Barclays investment side (primarily Barclays Capital) introduced to BGI never seemed like it was a good fit for the San Francisco-based folks: too much flash and display of wealth for a crowd that seemed more Main Street than Wall Street, too much Bear Stearns or Goldman Sachs-wannabe for a group of employees that culturally seemed more like a fit at Charles Schwab, Inc. (Note: Not surprisingly, Barclays Capital bought and has moved into the former Lehman Brother’s headquarters on Wall Street.)
It was as if BGI had been asked to wear the Emperor’s New Clothes, and found them uncomfortable and misfitting.
The BlackRock crew has favorable press for running a good operation, and for running well-done integrations. It will mean change for folks at 400 Howard Street in the City, but it will in the end be good change: clear vision, clear culture, and a better fit with personal core values.