Merger Challenges of a Communications Equipment Company

HR on-boarding for the 1500 employees Payroll set up and support for all employees across all countries of operation Set up subsidiaries in 32 countries Corporate governance for all countries

The Challenge

The client, a US based IP infrastructure and Applications Company which had a very unique and complex situation at hand - it had acquired a division of a bankrupt multinational with nearly 2000 employees who had to be on boarded as a result of the acquisition. Subsidiaries had to be set up in 32 countries where these 2000 employees were located within a very short time frame The timeline for setting up the subsidiaries was very tight because the acquisition had to take place within a stipulated time frame. There were several areas that needed immediate attention and quick implementation.

HR on-boarding for the 1500 employees, and many of these employees were being transferred from a situation where there wasn’t enough headcount for them to have group schemes or benefits.

Accounting - As a result of the acquisition, the client had grown three times in size as a business and in six weeks, the client needed payroll set up and support for all employees across all countries of operation. The accounting books needed to be finalized and then rolled over from month to month. Considering the short time line and lack of resources, it would have been impossible for the client to do it owing to the sheer volume of work.

Payroll - Once payroll had been set up - the complications didn’t end there. Transitioning payroll was a huge task as there was limited information due to client staff and significant attrition post acquisition.

Share Transfer - The client had hired a law firm that had prepared a US tax plan for handling the acquisition, which required certain share transfers (driven by US tax consideration) to occur before some of the subsidiaries went live and before they acquired a new value, but the law firm could not execute on the ground given the short time line.

The Solution The scope of work was tremendous especially on the HR front, considering that in the EU countries, benefits cannot be reduced as result of an employment transfer.

The Nair & Co. team procured the benefits at very short notice, got them underrated and implemented it for a headcount of nearly 2000 employees across 15 European countries all in a period of six weeks.

Nair & Co.’s legal group implemented the share transfers with the help of its network of legal affiliates and ensuring all corporate governance procedures were in place for all the required countries.

Of particular note, in one European country where a subsidiary normally takes six weeks to set up, in this case was set up in three days by Nair & Co.’s legal team to enable employees to be onboarded.