European Experiences in University Mergers University mergers are complex processes that require careful planning and management of organizational change. They involve multiple stages including early thinking and target identification, negotiating a heads of agreement, conducting due diligence, developing a business case, negotiating legal aspects, planning the transition, and embedding the new organization. Key challenges include dealing with the unexpected, managing significant change, and addressing the emotional aspects of the process. Success requires tenacity to work through problems that may arise regardless of whether a merger occurs. Effective communication and engagement with all stakeholders is crucial throughout the process.

1. European Experiences in University Mergers
Mergers - processes
and pitfalls
Nigel Paul
Director of Corporate Services
8 March 2012

2. University of Edinburgh
Income: £650m; €800m
Students: 29,000
Staff: 11,000 (8000 FTE)
Campuses: 7
World Ranking 20 (QS)
Recent Mergers:
Research Unit Research Unit Whole institution

3. Mergers are:
 Complicated – the unexpected
occurs
 A massive change management
challenge
 An emotional experience
 Require tenacity
 Some problems will exist whether
merger takes place or not

4. Merger Process
Early Thinking
Decision
Heads of
Agreement
Governance
Due Diligence
Business Case
Negotiation
Legal
Transition
Planning | Implementation
Embedding

5. Early Thinking
• Why do you want to merger? – link to institutional
strategy? – what are success criteria?
research enhancement; student growth/experience; enhanced global
competition; political pressure; cost reduction ; link with private sector
• Who are the targets? – what relationships do you want to
cultivate before you start talking about merger?
• What sort of merger?
equivalent size; equivalent strength; large/small; strong/weak
• What is the future of the heads of institution /governing
bodies?
• What is the rate of change you want to undertake?
immediately on merger / later

6. What sort of merger?
Org A Org A+B Org B
Org A Org A Org B
Org B
Org A Org A Org B
Part B Part B

7. Early Thinking
• Why do you want to merger? – link to institutional
strategy? – what are success criteria?
research enhancement; student growth/experience; enhanced global
competition; political pressure; cost reduction ; link with private sector
• Who are the targets? – what relationships do you want to
cultivate before you start talking about merger?
• What sort of merger?
equivalent size; equivalent strength; large/small; strong/weak
• What is the future of the heads of institution /governing
bodies?
• What is the rate of change you want to undertake?
immediately on merger / later

8. Heads of Agreement / MoU
• Outline shape of the merger – sort out the business
matters
• Needs formal agreement from governing bodies of
parties involved
• Sets framework for subsequent discussions
• Cover as much as you can on the big issues, otherwise
detailed negotiations become more difficult
• Will normally include:
Aims & Objectives; Governance and organisation;
Finances & Funding; Employment; Services;
Intellectual Property; Liabilities &
Indemnities; Publications/branding;
Confidentiality

9. Governance - Structure
Government /
Governing body / Funding Body etc Governing body /
structure structure
Joint Steering
Steering Group Board Steering Group
DD Group DD Group
Negotiation Team Negotiation Team
Legal Team Legal Team
Implementation Dedicated Dedicated Implementation
Group Project Resource Project Resource Group
Post Post
Implementation Staff Unions Implementation
Mgt / Oversight Mgt / Oversight
Student Unions
Academic | Professional Academic | Professional
Services Alumni Services

10. Governance - Understanding and
Communication
• Project Definition Document (jointly agreed)
• Explain merger phases / processes
• Websites / Blogs
• Regular meetings – on agendas in committees
• Leadership capabilities / team building

11. Due Diligence
The aim of Due Diligence is to
• gather the information needed to understand the
operations and performance of the other institution
• identify the risks and issues that will need to be
addressed
such that
• a workable deal structure can be put in place,
• legal contacts/instruments for the transfer of the
business and assets appropriately deal with the key
issues
• effective planning for implementation of the merger can
take place.

12. Due Diligence
Identify Steering Group(s) – Academic/Professional Services;
Brief managers (both organisations);
Provide Checklist;
Managers to provide DD report;
Review Reports and extract main issues
• Finance HR
• Procurement Property & Environment
• ICT, Library & Heritage Assets
• Research Grants & Consultancy Intellectual Property
• Health and Safety Residences & Services
• Student Administration / Services Academic Support
• Legal and Compliance
• Subsidiary Companies

13. Vision & Business Case
Document to be produced:
• Vision reasons for merger,
• Academic & other Benefits
• Financial Costs/Benefits
• Implementation plans / risks
Submission to Government /
Funding Bodies
Used for public consultation

14. Legals
Statutory Merger
• Legal merger undertaken through Legislation
• Must operate strictly within the term of the legislation
• Work closely with government lawyers
• Usually everything transfers including historic liabilities
Contractual Merger
• Legal merger undertaken though contract(s)
Purchase and Sale Agreement, Property, Technology Transfer etc
• Consider whether better to transfer a legal entity or a
staff/business activity
• Cover every aspect of merger – links with negotiation
• Take specialist legal advice

15. Negotiation
Statutory Merger
• Negotiation with other institution
• Negotiate with government/funding bodies
Funding of merger; property changes; staffing changes
Contractual Merger
• Negotiate with other parties & gov’t/funding bodies
Value of organisation being transferred; funding of merger;
future income; property changes; staffing changes; staff terms and
conditions; residual liabilities (pension funds / environmental
liabilities; warranties
• Conflict of Interest – those in unit being transferred
should not be part of negotiation
Negotiating Remit – Tactics – leader / escalation

16. Transition Planning
Identify Steering Group(s) – Academic/Professional Services;
Plan Communicate Action
Determine new high level organisation
Brief managers (both organisations) to develop detailed
organisation proposals, implementation plans and staffing
requirements •
•
Academic Structure
Teaching/Assessment
Timetables
Academic Support
• Finance HR
• Procurement Property & Environment
• ICT, Library & Heritage Assets
• Research Grants & Consultancy Intellectual Property
• Health and Safety Residences & Services
• Student Administration / Services Subsidiary Companies
Determining which member of staff goes into which role in new
organisation –permanent roles / transition roles
Process for communicating role to staff
Processes for communicating with Staff Unions
Process for consulting with students and merging Student Unions

17. Transition Implementation
Launch Implementation
Pre merger date actions
• systems set up (e.g. payroll);
• statutory notifications;
• training in new systems/processes
Actions on/following merger date
• welcome activities,
• data transfers between systems,
• operation of new systems/processes/structures

18. Embedding
Settle in people and new ways of working
Complete post merger project actions
Move to “ business as usual” as soon as possible
Team building / culture development
Lots of communication – groups / individuals
Post merger review(s)

19. It’s all about people
• Emotional roller coaster
• More than communication,
communication, communication
• Need engagement, involvement,
challenge, recognition
• Active influencing
• Provide support for those struggling
Optimism, Excitement, Enthusiasm, Hope
Pessimism, Worried, Denial, Panic,

20. nigel.paul@ed.ac.uk