Integration Practices

Transcription

1 Integration Practices Practical lessons from recent asset integrations Mark Davis General Manager Operational Excellence November 2015

2 Integration activity at MMG 2012 Anvil Mining (Kinsevere) Open pit copper mine Design 60ktpa cathode Ownership 100% MMG Group Office 2014 Las Bambas Project Open pit copper mine Design 450+ktpa concentrate Ownership 62.5% 2

3 Integration Objectives 1. Understand and establish ownership of the asset 2. Transfer control from current owner and position as the operator of the asset 3. Maintain/improve safety performance and operational (cost and schedule) KPIs 4. Retain and engage critical capabilities and people 5. Deliver comprehensive Beyond Integration Plans to the new Management Team 6. Position asset to deliver on M&A valuation case Integration Key Principles Focus on key areas and close out outstanding due diligence items that could have a material impact on the value of acquisition Adopt a light touch approach and only integrate what is mandatory, not discretionary, to support the delivery of the project on time and on budget while providing management control Respect and collaboratively work alongside existing operations and project personnel. The role of the integration team is not to take over the project Develop a strong understanding of the asset, the region and the country 3

4 Key Phases Phase 1: Pre-Assessment, Planning & Mobilization (12 Weeks ++) Work streams and steering committee Timetable, outcomes, boundaries Integration model, processes and protocols & rules of engagement Mobilise Integration team leaders Arrange support and infrastructure WAIT FOR DEAL TO BE DONE.. Phase 2: Integration Readiness (8 Weeks) Build knowledge (doc review, briefings, one on ones) Identify and prioritise activities Operational goals and Integration KPIs Detailed Execution Plans: Transfer of Management Control Transfer of Project Management Control Stakeholder Assessment & Comms Plan Common system/process rollout Develop Day 1 Plan Develop 60 Day Plan Identify Management Team for Day 1 Phase 3: Integration Execution (60 Days) Announce new organisational structure Deploy new systems and processes Execute integration plans (Day 1 and Day 60) Monitor compliance with integration milestones & targets Handover on-going beyond integration work stream activities to new asset Management Team (Business as Usual) Engage Integration Steering Committee Appoint Integration GM and PMO Governance Integration Steering Committee to review and ratify implementation plans Communication EXCO takes over from ISC and integration responsibility moves from the Integration General Manager to the asset General Manager Identify key integration stakeholders Develop and launch communication plan Internal/External communication minimise uncertainty and manage political/social sensitivities

5 Plan on a Page Overall Integration Deal Capture April May June July August September Pre-Assessment Integration Readiness Integration Execution BAU October SPA Key Integration Events Draft Integration Plan complete Mobilization plan complete Integration Budget approved Delegation of Authority Stakeholder / SHEC Stakeholder Comms plan approved Project Delivery / Ops Readiness People / Culture 13 Apr Key personnel retention strategy finalised SBS / Finance / Commercial Supply / IT / Legal Pre-Assessments Complete & Final Integration plans developed Week 1 Comms delivered Week 2 Comms delivered Fatal Risk Gap Analysis complete, with Action Plan Community positioning paper approved by Exco #1 16 June ExCo Review Change of Ownership Readiness Meeting Phase II Readiness Review 31 Jul MMG Endorsed Community Management Plan Preliminary estimate of cost & schedule to complete Ops readiness assessment completed Individual retention plans for key people developed SPA Governance Monitoring & Compliance in place CoC Stakeholder /Branding /Comms Plan Approved Concentrate Logistics assessed, road transport plan affirmed IT separation commenced Change of Ownership Delegation of authority in place Fund for project completion (2014) approved Day 1 Comms pack delivered Aviation Management Plan Crisis Management & Emergency process endorsed Project health check complete Funds for project completion approved Ops reporting in place for safety, volume & cost 30 Sep Plans complete with owner identified for trailing actions Handover to Country Manager Advisory board appointed #3 Comms Plan complete Rebranding plan complete Project control gaps closed Definitive cost & schedule to complete estimate Day 1 org structure approved by ExCo Leadership Team in place & key resource gap addressed Change Management Plan delivered Rem committee Approval of Rem Structure #2 Org structure changes implemented All employees have clarity on role and remuneration TSA governance, monitoring & compliance in place Day 1 IT & Shared Services in place Key contracts novated & transferred # change log Financial reporting process in place Completion accounts prepared Required insurances retained & gaps addressed BaU work plans completed Close out Report & KPI results TSA services separated BaU Planning Systems in place Planning cycle aligned with corporate planning IT separation completed (continues into 2015) = complete = on track = area of concern = Overdue 5

6 Key Relationships Understand and obey requirements of the Shareholder Purchase Agreement during the Pre-Closure period Maintain close connection with Deal team leader working under Transitional Services Agreement to achieve timely Close Maintain close connection with corporate function GMs back in the Head Office Integration Principles Leverage Protect and create value the at all parent times. company Operating Model (no exceptions) Act as an ambassador of MMG and Las Bambas. Adopt a light touch approach and only integrate what is integration team is not to take over the Las Bambas Maintain mandatory, not discretionary, close to connection support the delivery of with new project. asset GM to align the project on time and on budget while minimising Respect diversity at a country, region and asset level. change. Respect and collaboratively work alongside existing Las Bambas and project personnel. The role of the current and future activity/plans with M&A valuation case 6

7 Reinforcing lessons for future integrations Apply dedicated resources of the highest level of capability necessary to get the job done: Source internally and support with externals (for example external work stream experts doing back office tasks, stress testing plans and providing PMO); and Backfill internal resources Prepare integration work team members on the culture of the company doing the integration, the culture of company being integrated, and not just the culture of the Country Maintain the focus on the Integration key deliverables and be clear up front on how transition to Business As Usual will be done Maintain the short (60 day) integration period to drive attention on the key deliverables (nothing more, nothing less) 7

8 Key Messages from those integrated Understanding local requirements and Integration planning and delivery was enhanced by the on-boarding of senior leaders from acquired company ahead of change of ownership All stakeholders warmly welcomed the new owner s commitment to the country, asset, people and culture The number and quality of MMG people that visited site teams was especially important, it impressed the new asset team with their knowledge and passion for mining Visible and effective leadership with multiple visits into country by senior most company leadership 8