[tab name=’Guidelines’]

Guidelines : Of Mergers Acquisitions/Restructuring

Announcing Mergers, Acquisitions, or Restructuring

Guidelines and Alternate Phrases

• Announce the merger, acquisition, or restructuring up front.
• The many rumors you have heard do have some basis in fact–we are pleased to announce that….
• We have learned today an agreement has been reached for Farmington investors to acquire the stock of Bledson International. Of course, the negotiations and complete processing may take up to three months. In the interim period, we anticipate operating as we do currently; no changes in management have been discussed or approved.
• Today Universal and Harrington Uptown have reached an agreement to merge and restructure their organizations so both can devote time, resources, and expertise to what they know best in the _____ industry.
• This week Fullerton, Inc. will begin a major restructuring effort to decentralize our operations and push decision-making lower in the organization. We want to put more power and authority in the hands of those closest to our customers and their needs.
• Bozell, Inc., has charted a new course through the murky economic waters of the industry downturn. Effective October 1, we will begin to put into effect a restructuring plan that will help us eliminate duplication of efforts in our field operations while preserving the autonomy of individual regions.
• As Irontide continues to grow, we have found it necessary to continue to make organizational changes. These changes are beneficial for all our employees because we have opened new opportunities for advancement.
• Address immediate questions employees will have in their mind, such as those about layoffs or new openings, benefits, share values, or market position.
• I’m sure the question in most minds is that of layoffs. Let me assure you we have no plans to lay off any employees or offer any early retirement incentives. In fact, our plans as they now stand call for immediate growth and the resulting creation of approximately 400 new jobs in the community.
• Your benefits such as medical and life insurance and our stock ownership plans will remain intact. We anticipate no changes in coverage or costs as a result of this agreement.
• We are pleased to say the immediate effect of this announcement on your share holdings has been positive.
• Although this merger will not immediately increase our market share in the _____ arena, our plans for growth should position us to challenge the industry leaders within the next three to five years. We are pleased to say we now have a goal, and we have a plan.
• Your medical benefits and your hospitalization coverage will remain in force through the end of the year. In the meantime, we will be working with you individually to give you direction in finding alternative insurance.
• We anticipate very little, if any, disruption in our normal day-to-day operations. You will report to the division directors, who will report to the same regional directors. The only visible change evident immediately will be….
• This acquisition will, of course, dictate significant restructuring of our marketing division. I’ve outlined below the major reporting changes….
• Please rest assured your jobs will in no way be affected.
• Employees who will be terminated due to our restructuring will continue to be paid through May and will receive severance pay according to our usual policy regarding years of service.
• Our Human Resources office will provide out-placement assistance, including résumé preparation, interview techniques, and aptitude testing.
• Promise to provide other details as soon as they become available.
• Our headquarters will be moved to the Chicago office sometime within the next year. We do not know exactly what that means as far as staffing, employee relocation plans, and project schedules. However, as soon as we complete our studies and make these decisions, we will keep you informed.
• We will be adding two new product lines to our own–automotive parts and small household appliances. Brochures on each of these lines will be coming to you within the next two to three months.
• Let readers know where they can direct other questions about changes.
• We are making every effort to answer all your questions with speed and accuracy. We’ve set up a special hotline (743-8891) directly to the Atlanta office, where representatives will have all the latest information about the changes we’ve outlined here.
• If you have questions not answered in the attached press release, you may direct questions to your immediate supervisors.
• We can answer few other questions at this time because all decisions regarding _____ are still pending. Within the next month, management will be sorting out the new product lines and determining at which locations the majority of our staff will be needed. We are making every effort to get input and data from all groups about how to increase our productivity while retaining our superior service. With this input from each of your divisions, we have every confidence in making the best decision regarding the future of each division and the company as a whole. Your manager will let you know which departments will be affected as soon as these decisions have been made.
• We will continue to update you with details of this decision as soon as we ourselves learn of further plans.
• Be optimistic in tone.
• Rumor has it most of our employees are quite eager to complete the final transactions that will make us the largest retailer in the state.
• Keep up the good work. There’s a bright future ahead.
• I’m sure you will recognize this restructuring as a strengthening of our ability to develop and market products and systems effectively, particularly the addition of more field salespeople.
• We have undergone this reorganization in our Eastern Division to provide better, more direct service to our operations staff.
• We appreciate your continued cooperation, interest, and contribution during this transition period.
• Thank you for your patience in this transition period.
• We have every confidence you will finally agree this decision was the only sensible one in light of today’s economy.
• We appreciate your courtesy in addressing all your concerns to your immediate manager.
• We look forward to a promising future.
• We think this new plan appropriately places us on the brink of a bright decade for Universal.
• Thank you for your hard work and past loyalty. This new direction offers an even more promising horizon.
• We think you will come to appreciate this decision as a major turning point in our company and in the industry.
• We look forward to increased profitability for all concerned.
• We’re glad you’re on board for this promising new future.

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[tab name=’Example 1′]

Example 1: Sample announcements letters of mergers

Company Name or Letterhead
Address
City, State Zip

Date

Addressee
Address
City, State Zip

Dear Hosack Employees:

Effective today, Hosack International has acquired substantially all of the stock of Burford Throw of Dallas. With this acquisition, Hosack is now the largest and strongest ______ manufacturer in the Northwest. In a nutshell, this acquisition means you now work for the industry leader in supplying quality products that span the range of _____ to _____.

Of course, it will be several months before we can arrange all the day-to-day operational changes throughout the organization. As you have questions about job openings, benefits, or insurance coverage, please direct them through the normal channels. Please be patient with us in getting the right answer to you.

We also want you to be part of this exciting opportunity to work out creative solutions to our sudden growth and expanded opportunity. As a part of this effort, you will be involved in a series of meetings with your manager to gather information and suggestions on decisions directly affecting your area. Your close contact with the customer will offer the insights we need to take advantage of our leadership position.

We look forward to your help with our operational plans for growth. All of us have an exciting future around the corner.

Sincerely,
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[tab name=’Example 2′]

Example 2: Announcing mergers letters

Company Name or Letterhead
Address
City, State Zip

Date

Addressee
Address
City, State Zip

To All Employees of Irontide:

Today Grafton, Inc. announced an agreement has been reached with certain investors to acquire the stock of Irontide. This agreement is subject to several conditions that must be met before the acquisition is final, and this negotiation process may require up to five months. Until this agreement is final, there will be no organizational changes within our company.

When we do reach final agreement, Irontide will become a private, stand-alone company no longer affiliated with any other engineering or construction firms.

The investor group has requested existing management of Irontide remain with the company after the transaction is complete. Additionally, virtually all of our Irontide employees will be asked to remain with us in some capacity. Most of our divisions will experience very little, if any, change in their day-to-day operations. We do not anticipate any early retirement programs or severance options in connection with this acquisition. We also expect all benefits to remain as they now are.

The next few weeks will be busy, exciting, and challenging ones. Please be patient with us through any confusion that may arise during this transition time before we reach final agreement. We will keep you informed of all the events and plans as we learn of them ourselves.

Sincerely,
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[tab name=’Example 3′]

Example 3: Company merger letter

Company Name or Letterhead
Address
City, State Zip

Date

Addressee
Address
City, State Zip

Dear Fellow Employees:

We are in the process of making a number of changes in our worldwide manufacturing operations that will require us to establish an after-tax profit reserve of about $555,000,000.

As you can imagine, this decision to establish a restructuring reserve has been given thorough and deliberate consideration by the company’s management. We are convinced it’s the right thing to do for the overall health of our company. As a result of this reserve, we can become more cost competitive and continue to bring innovative products to our customers.

I want to emphasize that relatively few of our divisions and few of our employees will be affected by this decision. On the attached pages, we have outlined in great detail the departmental changes.

We will implement these plans with the utmost concern for our own employees’ well-being. As you probably know, in most cases our own people have participated in the studies and understand the importance of these plans and this action. At the few sites where our studies are still incomplete, we will continue to listen to our own staff and work closely with them, keeping you informed every step of the way.

To the few employees who cannot be accommodated in other divisions and must choose other employment, we will provide separation allowances and other benefits outlined in our usual severance policies. Finally, we pledge those leaving the company every reasonable assistance in finding suitable employment.

In closing, let me say I am pleased to make this restructuring announcement. We have a fine company–a company with people who have the highest values and interest for their colleagues. I’m confident you will come to share my enthusiasm for this decision.

Yours truly,
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[tab name=’Example 4′]

Example 4: Acquisitions and mergers

Company Name or Letterhead
Address
City, State Zip

Date

Addressee
Address
City, State Zip

To the Burford-Hymil Organization:

Our company officials and those of Freeman Inc. announced today an agreement has been reached on the merger of our two companies, to be effective May 9. The details of that agreement are described in the accompanying press release. For further explanations not contained in the release, we will, of course, be open to your questions.

I simply want to tell you how pleased I am about this merger. Freeman Inc. is a fine company, a company with values and people similar to our own. In the future, as you come in contact with these new members of the Burford-Hymil organization, I’m confident you will come to share my great enthusiasm for this relationship.

Sincerely,
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