We have been focused on what is essential for the Suncorp acquisition to work – outside of the regulatory approvals – and what can go wrong.
In the interest of an easier sleep – and getting a deeper understanding of what makes acquisitions of this magnitude successful – we spoke to 15 banks across Europe, the UK and the Middle East as well as Australian companies from other industries that had recently completed M&A or digital builds in unique contexts.
These conversations were highly informative - and occasionally frightening. Most importantly, engaging with professionals who have lived this experience – sometimes many times over – has accelerated our existing knowledge and capabilities and provided some solid lessons.
Those who are successful in M&A are relentless. It can be thought of as a negative attribute but I have learnt it is not a bad word. We can be relentless in what we are trying to achieve and still hold to our values. It’s a word we need to get used to if we want this deal to succeed.
The lessons of successful M&A were consistent, across every organisation we visited. In particular, three key components of success stood out:
Deal logic - The agreement to acquire Suncorp Bank represents a growth strategy for ANZ and we believe Suncorp is a terrific franchise and a natural fit. In line with the bank we are building, ANZ is looking to secure this deal to accelerate the growth of our retail and commercial businesses while also improving the geographic balance of our business in Australia.
The companies that were successful were relentless in sticking to this “deal logic”. What was most fascinating about those most successful was they had done it loads of times.
One particularly impressive company was able to plan the completion and migration of the transaction on one page. “How did you get so good?” I asked. Their response was frank: “Well, the first one wasn't great. Actually it was terrible. And the second one wasn’t so good either. It wasn’t really until the eighth or ninth time we really got our act together.”
What was clear was they were relentless at sticking to why they were doing the deal. ANZ must stick to the deal logic – to acquire 1.2 million customers. We believe Suncorp customers will be better served by our products and services.
Pace – Successful acquirers were relentless on the pace of execution and not taking their foot off the accelerator. Victory doesn’t happen on the day the transaction is completed. In the marathon that follows an acquisition, we must be relentless in hitting all milestones.
Culture - The third component of success underpins the previous two: the approach to culture.
Being very clear and aligning values - the way we do things, the way we make decisions - is hugely important. If the alignment is not there, it becomes difficult to stick to the deal logic and execute at pace. We believe bringing Suncorp Bank into ANZ will be an enriching experience for people on both sides. It will make us better as a business, as an employer and a community partner.
We have a long history of bringing companies into ANZ, being successful at integrating those acquisitions and fostering the cultural alignment.
Louise Higgins is Managing Director of Suncorp Integration at ANZ