Strategic Treasury

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Sharing Experiences of Post-M&A Treasury Integration Many treasurers are involved in mergers and acquisitions (M&A) and have experienced the challenges of either carving out or integrating treasuries. During a popular session at the EACT Summit, three senior treasury practitioners shared their contrasting M&A experiences.

Sharing Experiences of Post-M&A Treasury Integration

Sharing Experiences of Post M&A Treasury Integration

Many treasurers are involved in mergers and acquisitions (M&A) in some shape or form, and have experienced the challenges of either carving out or integrating treasuries. During this session, moderated by Sebastian di Paola, Senior Partner at PwC, three senior treasury practitioners shared their contrasting M&A experiences.



Arto Sirvio, Head of Cash & Risk Management, Nokia
Markus Unternährer, Head of Corporate Finance and Treasury, LafargeHolcim
Levente Lázár, Treasurer, GE Power & Water


Nokia: A Mixture of Parts

Arto Sirvio, Head of Cash & Risk Management, Nokia
Nokia is a very different company today than when I joined 18 years ago, and even four or five years ago when we were still in the mobile phone business. Since then, the business has been transformed, with three key events taking place in rapid succession. First was the sale of the mobile phone business to Microsoft in 2013. Second, we used the proceeds of the sale to buy Siemens out of a joint venture, so we became a telecom infrastructure and services company. Third, which is still ongoing, is the Alcatel-Lucent acquisition, which firmly establishes the business as a leader in these sectors.

As a result, Nokia today is a mixture of parts of legacy companies, such as Motorola, Panasonic, Alcatel-Lucent, Siemens as well as Nokia, as the companies we acquired had themselves engaged in M&A. When the Alcatel-Lucent deal was announced, and became a company of €30bn of revenue and 104,000 employees globally, only 1,400 of these had been employed by Nokia two or three years earlier. This creates a real melting pot of business cultures and backgrounds, which can be fantastically powerful, but also quite daunting to manage.

Embracing diversity

From a treasury perspective, while Nokia’s treasury function has always been highly centralised, this is not the case for all the companies we acquired. We also had different approaches to treasury policy, such as risk hedging, and the use of structures such as payments on behalf of (POBO): a cornerstone of Nokia’s cash management strategy. Acquiring new businesses also meant expanding the reach of treasury. For example, an important characteristic of Alcatel-Lucent’s treasury was the management of sizeable defined benefit pension schemes, most notably in the United States, so as part of the acquisition, treasury became a substantial pension fund manager.

We needed to consider in detail what we had acquired in order to make the best long-term decisions for the new company, but we also needed to manage our business as usual. Consequently, we issued an interim treasury policy quite quickly that covered issues such as counterparty credit limits, hedging policies etc. whilst devising a more structured longer-term approach.

Integrating our treasury technology environments was also a key area of focus. Fortunately, both Nokia and Alcatel-Lucent used FIS’ Quantum system as their TMS, so this was a straightforward process. There were more challenges when it came to the ERP however, particularly as the ERP environment can typically become quite fragmented after multiple acquisitions. The way we overcame this was to have an in-house system, built and maintained by a treasury IT team of around ten people. This system provides a range of treasury capabilities such as supporting the payment factory. The benefit of this approach is that IT were already accustomed to plugging this system into different ERP systems as it is system-agnostic, which made the integration process far easier.

From diversity to a common identity

One of the outcomes of combining multiple elements of different businesses that had themselves been through M&A was that some of these challenges and experiences were still fresh in the corporate memory. As a result, there was a strong will not to try to replicate one or more legacy companies, but to do things differently and create a distinct corporate identity.

This was particularly important given the extent to which treasury changed throughout this period. At Nokia, we had a global treasury headcount of roughly 45 people before embarking on our M&A journey, and this quickly increased to 80 and ultimately around 180 people. This has to be managed properly, however, and you need a clear view of what the organisation needs to look like, and then recruit accordingly, with a professional recruitment process including applications and interviews, involving HR as well as treasury. The outcome is a fair and transparent process of creating a strong treasury organisation with the right balance of skills and backgrounds. 

Arto Sirvio“For me, speed of execution is important. When two companies come together, there is two of everything: two treasuries, two systems, two sets of processes. Pick what appears to be the best in each case and move on. Avoid endless evaluations and beauty parades. Later on, you may consider why you picked a Volkswagen when there was a Mercedes sitting next to it, but at least you started driving and you didn't stop.”

Arto Sirvio, Head of Cash & Risk Management, Nokia


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