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Managing the Combined Company
“Global deals – especially deals of this magnitude- are very large and very complex, with a lot of moving parts.” (Bisch, 2007) With any deal involving the merger of two large companies, there is potential for growing pains as technological systems, and a potential for diseconomies are brought about because of innumerable complexities. This can also mean that client service takes a back seat to managing the transition.
A major structural challenge with the combination of the companies is due to technology integration. Both companies operate from different systems platforms and well-thought out migration plans from current systems to new systems will take a few years. When Bruce Van Saun the CFO of the newly formed bank was asked, “how long will it take to integrate the two companies”? He stated, “We have a two-and-a-half year time frame to phase in the synergies, post closing. The biggest challenges will be around some of the technology integration between the two companies”. (“Bank of New York’s Bruce Van Saun”,2007)
With Bank of New York Mellon becoming so large other companies may be able to take advantage of the inefficiencies’ that come about from a merger. CEO from Northern Trust Rob Baillie stated that, “You can always get to a point where you have diseconomies; you bring complexities into your business and they can make you inefficient”. (Bisch, 2007) Many other rivals agree with this notion, as well as client uncertainty that are brought about from a merger. In the short term this may create some opportunities for other firms to cap ...