Setting up post merger integration process for ma consulting service at mekong securities joint stock company

NATIONAL ECONOMIC UNIVERSITY BUSINESS SCHOOL ***************** PHAN ANH TUAN SETTING UP POST-MERGER INTEGRATION PROCESS FOR M&A CONSULTING SERVICE AT MEKONG SECURITIES JOINT STOCK COMPANY BACHELOR OF BUSINESS ADMINISTRATION IN ENGLISH (E-BBA) THESIS HANOI, 2014 NATIONAL ECONOMIC UNIVERSITY BUSINESS SCHOOL SETTING UP POST-MERGER INTEGRATION PROCESS FOR M&A CONSULTING SERVICE AT MEKONG SECURITIES JOINT STOCK COMPANY BACHELOR OF BUSINESS ADMINISTRATION IN ENGLISH (E-BBA) THESIS Student : Phan Anh Tuan Class : E – BBA 2A Supervisor : MBA Pham Sy Long HANOI, 2014 ACKNOWLEDGEMENTS My research and dissertation would not be productively completed without the generous assistance and patience received from many people Taking this opportunity, I would like to express my gratitude to all of you First of all, I would like to extend my special thanks to my supervisor, MBA Pham Sy Long, who provided me with useful advice, guidance and insights Secondly, I would like to express my deeply thanks to my school, the Business School of National Economics University (NEU), where I have a good chance to study in EBBA program, I would like to indebted to all of professors and lectures in the primary committee for their comments and directed suggestions Last but not least, the author would like to express my appreciation to my dear parents who gave me enthusiastic support and this chance to have beautiful time with EBBA at BS – NEU Author Phan Anh Tuan ABBREVIATIONS EBBA English – Bachelor of Business Administration MSC Mekong Securities Joint Stock Company M&A Mergers and Acquisitions PMI Post-merger Integration WTO World Trade Organization TABLE OF CONTENTS ACKNOWLEDGEMENTS .1 EXECUTIVE SUMMARY INTRODUCTION I Rationale II Research objectives III Research methodology: IV Data collection .5 V Research structure CHAPTER - THEORETICAL BACKGROUND ON M&A CONSULTING SERVICE AT SECURITIES COMPANY 1.1 Theoretical background on M&A 1.1.1 Definition of M&A 1.1.2 Classification of M&A 1.1.3 Motivation in M&A .11 1.2 Theoretical background on Post-merger: 15 1.2.1 Definition of Post-merger: .15 1.2.2 Role of Post-merger Integration in M&A: .16 1.2.3 Post-merger Integration tasks 17 1.2.4 Feature contributing to a successful M&A 23 1.3 Theoretical background on Securities companies .24 1.3.1 Theoretical background on Securities company 24 CHAPTER – SETTING UP POST-MERGER INTEGRATION PROCESS FOR M&A CONSULTING SERVICE AT MSC 26 2.1 Introduction of of Mekong Securities Joint Stock Company 26 2.1.1 Overview of Mekong Securities Joint Stock Company: 26 2.2.2 MSC’s organization structure: .26 2.1.3 Professional service and key accounts: 29 2.2 Overview of M&A activities in Vietnam: 33 2.2.1 History of M&A in Vietnam: 33 2.2.2 Current situation of M&A activities in the last few years: .34 2.3 Setting up Post-merger process for M&A consulting service at MSC: .40 2.3.1 Legal requirements for providing Post-merger consulting service: 40 2.3.2 Situations Post-merger Integration service provided: 40 2.3.3 Current M&A process at MSC: .40 2.3.4 Setting up Post-merger process for M&A consulting service at MSC 43 CHAPTER - RECOMMEMDATIONS FOR LAUNCHING SERVICE .49 3.1 General comment: 49 3.1.1 Advantages of MSC: 49 3.1.2 Challenges of MSC: .49 3.2 Recommendations for launching service: 50 CONCLUSION .51 LIST OF REFERENCES 52 APPENDIXES 53 APPENDIX A: LETTER TO CUSTOMERS SAMPLE 53 APPENDIX B: POST-MERGER INTEGRATION TIMELINE SAMPLE 55 APPENDIX C: POST-MERGER INTEGRATION CHECKLIST 56 LIST OF TABLES Table 1.1: Post-merger Integration tasks 17 Table 2.1: MSC’s customers 30 Table 2.2: MSC’s customers 31 Table 2.3: MSC’s customers 32 Table 2.4: MSC’s customers 33 LIST OF FIGURES Firgure 1: Research process .5 Figure 1.1: Classification of M&A base on approaching types Figure 2.1: MSC’ organization structure 27 Figure 2.2: M&A Total Deal Size and Number of Deals in Vietnam .34 Figure 2.3: Number of M&A deals in 2011 35 Figure 2.4: Percentage types of M&A 36 Figure 2.5: M&A consulting process at MSC 41 Figure 2.6: Post-merger Integration process proposed 43 Figure 2.7: Degree of Integration 44 Figure 2.8: MSC supporting team 45 EXECUTIVE SUMMARY M&A becomes more and more popular in Vietnam business environment nowadays The increase in the number of M&A deals in recent years raises the need for consulting service in this field Financial consulting institutions usually find M&A consulting service very attractive with high consulting fee (about 1.5 % value of the M&A deal) However, they often underestimate the importance of postmerger integration in M&A which lead to many failure deals in the past and their reputation got damages Due to the lack in M&A process of securities companies which results low quality of M&A consulting service, the author will collect the theoretical background from lecture, information on the Internet and financial journals to propose Post-merger Integration process to build the competitive advantage for Mekong Securities Joint Stock Company In the first part, the thesis will provide theoretical background on M&A and Securities companies such as  Definitions of M&A, Post-merger integration and Securities companies  Classification of M&A and Securities companies  Motives of M&A  Features for a successful M&A  Tasks in Post merger integration In the second part, the thesis provides a broad view about the M&A environment and market in Vietnam Current situations in many sections of the economy are updated to the readers Generally, along with the economic recession, the number of M&A deals and total value of the deals has decreased in the last two years In addition, MSC has been introduced briefly with basis information like