[Excerpt] What keeps human resources professionals and in-house attorneys up at night? Probably many things, but during a cross-border M&A deal, the nagging questions often revolve around “people” issues: How will the employees transfer from the seller to the acquirer? What are the timelines and gating items to reaching “day 1” with an in-tact workforce to carry out the business? What can be done to ensure employee retention, provide for a smooth transition of services and limit the loss of productivity? Are layoffs an option? Can employees effectively delay or stop the transaction?
While people simply are not predictable in the way that corporate structures and tax solutions can be, there are tried and true methods for recognizing key issues and limiting their potential to become HR nightmares. Companies that have gone through cross-border transactions, whether on the seller or acquirer side, likely will be familiar with these issues, most of which arise during post-acquisition integration, that is, at that stage after close of the M&A on the U.S. level when the acquirer consolidates the newly acquired entity and preexisting foreign subsidiaries.
That said, strategically addressing many of these issues before the U.S. acquisition closes can help avoid HR nightmares. To illustrate the importance of planning, the following is a snapshot of issues arising in, and tips to successfully maneuver through, an international M&A.