Avaloq, headquartered in Switzerland, is a market leader in global digital banking. It was acquired by the leading Japanese IT conglomerate NEC Corporation at the end of 2020, despite COVID-19 pandemic challenges faced during the sale process. The aim of the M&A was to strengthen NEC’s cloud software services in digital finance and government, essential pillars for its smart cities strategy. The case explores the M&A process from the acquiree’s viewpoint. Avaloq’s leadership team were debating which post-merger integration structure to propose to NEC: full merger, partnering or a hybrid approach? To help the protagonist solve this dilemma, the following perspectives and their strategic alignment are analyzed in depth, giving valuable insights into the integration direction: Organizational business models identifying M&A synergies; joint value-creation strategies and integration design ensuring the resulting M&A value is greater than the sum of its parts; industry drivers promoting vertical or horizontal integration; and the role of management/employee preferences in relation to M&A direction within the broader perspective of managing cross-cultural differences.
- Identify M&A synergies and organizational design using the Business Model Canvas.
- Assess industry forces via the double helix framework (vertical vs. horizontal integration).
- Understand how culture, leadership and human factors impact M&A integration design.
- Devise the best strategy to maximize and realize value creation.
IMD retains all proprietary interests in its case studies and notes. Without prior written permission, IMD cases and notes may not be reproduced, used, translated, included in books or other publications, distributed in any form or by any means, stored in a database or in other retrieval systems. For additional copyright information related to case studies, please contact Case Services.
Research Information & Knowledge Hub for additional information on IMD publications