Any executive who has gone through a merger, however well planned and executed, knows that it is a challenging process. Two essential ingredients are required before merger discussions can proceed from the initial "what if" stage to agreement on all critical and strategic issues. These ingredients must be developed by the chief executive officers through face-to-face meetings and a combination of intuitive response as well as specific examination of strategic issues. The two ingredients are early agreement on and understanding of the underlying principles that will guide merger discussions, and the development of a level of trust that permits full discussion of all important issues.
The merger discussions between myself and Stan Bright moved rather quickly through the development of trust and an agreement on the principles that would allow us to achieve a merger of equals. In general terms, the principles that guided our discussion included the concept of a strategic alliance through a merger of equals, a plan for corporate governance, a plan for management succession and transition, and a commitment to maintaining a corporate presence in our key communities.
The merger discussions that followed the development of principles were not always easy, but we moved forward knowing that we could compromise on nonstrategic issues without requiring compromise by either party on the principle issues. We were guided by a common goal: to create a new company that would be stronger than either of the predecessor companies and have greater potential to prosper in the coming competitive utility business.
Synergies Too Good to Resist