| Fri 30 Aug 2002, 0:00 | | Nedcor Limited - Update On The Integration Of The |
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Nedcor Limited - Update on the integration of the new Nedcor Group
On 8 August 2002, a proposed new organisation structure for the new Nedcor Group
was announced. We indicated that the initial stages of the integration would
take place over the first four months, with staff being given the opportunity in
the first thirty days to give feedback on the initial proposals. There were a
number of proposals, which we are currently working through, and we hope to
finalise the new structure shortly. A team from NIB is running the integration
process for Nedcor, for which they are receiving a fee, on a normal arms length
basis.
During the integration process, the focus will continue to be on clients and
staff. Client communications have been increased to ensure that they are kept up
to date, and roadshows have been conducted to update staff, together with other
regular communications. To reduce the impact on staff where possible, a freeze
on external staff appointments has been implemented, to allow affected Group
staff to apply for vacant or new positions within the Group.
Intensive planning is required to ensure that the merger is a success and we are
now moving more actively into the divisional planning stages. Section 54
regulatory approval is expected at the end of November, and until this approval
is granted, none of the organisations in the new Group are permitted to move any
assets. This is also dependent on the outcome of the offer to NIB minority
shareholders. Thus, at this stage it is not possible to give any indications of
forecasts, synergies or estimated savings, but we can give more detail of the
processes and procedures that are planned for the next 3 months.
The overall objectives for the integration team are to facilitate strategy
formulation by the divisions in line with Group strategy, develop operating
functions for the new organisational structure, estimate the synergistic
potential of the merger, identify key improvement areas and non-core or non-
performing assets, and ensure business continuity from the time that regulatory
approval is received. A detailed implementation plan for integrating the
various divisions to form the new Group, covering all these objectives, is being
established, and key milestones have been set for the process. These key
milestones include the following:
August/September 2002
- Integration Team charters confirmed/modified, milestone plans completed, and
team member roles and responsibilities confirmed
- Initial strategic decision on branding, corporate governance to be taken
- Value Creation to be identified (synergies that can be harnessed to increase
revenue or decrease costs - initial estimates) and targets set
- Revenue protection strategies put into place
- Incentive schemes to be designed in terms of an interactive process between
business units /functional units, human resources and other stakeholders
- Major project issues and merger risks identified, and mitigation plans in
place
- Initial strategic decision on product portfolio and IT strategy will be made
- Preliminary business unit/function unit strategies to be presented
- Agree on Quick wins (areas where cost cutting or revenue generation is
prioritised)
- Nedcor 2003 budget formalised
- Business unit-based communication plans to be completed
- Feedback mechanism will be in place
October 2002
- Team tracking report, measures to recover from delays and measures to avoid
potential delays
- Final recommendation for strategic choices to be made
- Business unit/function unit strategies to be presented
- Preliminary organisational migration plan to be designed
- Detailed day one (i.e. the day after regulatory approvals have been obtained
and integration goes live) plans/check lists per team/cluster to be finalised
- Go/no-go recommendation to be given by teams
- Quick wins will be launched
- Risks to be monitored and reviewed
November 2002
- Team tracking report, measures to recover from delays and measures to avoid
potential delays
- Finalisation of implementation plan on strategic choices
- Final implementation of business unit strategies
- Final organisational migration plan to be completed
- Full list of value creation initiatives with benefits identified and sequenced
from 2003 to 2004 to be completed.
- Quick win impact to be assessed
- Detailed action plans to realise 2003 value creation initiatives due
- Risks to be monitored and reviewed
The integration plans from December 2002 onwards will be announced in early
November 2002.
A further integration update will be sent out in approximately a month`s time.
Date: 30/08/2002 03:20:00 PM Produced by the JSE SENS Department
