Spurred on by improving economic and financing conditions, a growing number of privately-held businesses are once more on the acquisition trail and are looking to expand.

According to the latest Grant Thornton International Business Report, the proportion of respondents anticipating making an acquisition in the next three years increased to 34% this year; an increase of 8% compared to 12 months ago.



And it’s those firms in the BRIC (Brazil, Russia, India and China) economies that are leading the way, with 44% of respondents considering an acquisition, compared to 27% in 2010.

Looking specifically at China, the report finds that 45% of businesses in mainland China plan to grow through acquisition; an increase of 19% over 2010, due to the desire to access new markets and acquire new technology or established brands.

Likewise, Indian companies are once more demonstrating a growing appetite for overseas expansion, with 40% of those planning an acquisition in the next three years expecting their deals to be cross border.

Mahad Narayanamoni, M&A partner with Grant Thornton India, believes this reflects a coming of age for Indian businesses: ‘Indian companies are now more experienced in dealing with overseas M&A transactions and are considered serious contenders for acquiring global businesses. Acquiring global brands, gaining access to overseas markets and leveraging new technologies for Indian markets are some of the key drivers for outbound acquisitions by Indian companies.’

In the United States, 41% of private companies said that they plan to grow through acquisition in the next three years; a clear rise from the figure of 32% for last year.

Stephen McGee, national practice leader of corporate finance at Grant Thornton US, explains: ‘After two slow years, with an improving economy and easing credit market, there is considerable pent-up demand for acquisitions.’

The Grant Thornton figures for mainland Europe also show rising interest in M&As, with 28% of private firms looking to grow through acquisition compared to a figure of 25% for last year’s report.

With many firms in many regions in an acquisitive mood, it is likely that in the future we will see more corporate stakeholders being presented with the challenge of integrating newly acquired operations and their fleet requirements.

From the HR perspective, there are the issues involved with any remuneration and benefits harmonisation process to ensure the needs of both organisations are met and to ensure a suitable package to retain top talent – and this will involve the fleet team when it comes to company cars.

But from the perspective of the global fleet team, such acquisitions and mergers also present the challenge of rolling out a global fleet policy that offers harmonised strategies where possible whilst continuing to recognise local requirements.

The subject of developing a global fleet policy is one that we cover regularly in International Fleet World as an increasing number of companies look to harmonise their global fleet policies due to the inherent efficiencies that can be attained. This has been heightened in recent years by the increased drive for cost savings – and as a growing number of firms develop an appetite for acquisitions, it is a trend that is likely to continue growing.

So what issues should fleets consider when looking to streamline new operations in line with the existing fleet policy?

According to LeasePlan, all generic process and procedure aspects of the fleet policy could, with some tuning and tailoring, easily be re-used for newly acquired operations.

Consultant Nathalie De Vries says: ‘This part of the policy could be rolled out relatively quickly although the speed of implementation and adaptation is dependent on the culture and autonomy of the local entity as well as the international mandate from the mother company.’

But just like with the initial set-up of a global fleet policy, the expansion to a new acquisition requires some careful treading to ensure that whatever is imposed is relevant to local practice.

Ms De Vries explains: ‘When it comes to legal, fiscal, cultural or price aspects, a car policy needs to be country-specific and is therefore the more complex and time-consuming aspect.

‘To set all parameters correctly for a new country, local information on the “as-is” situation needs to be collected and analysed; what is a common car, what are common contract parameters, what are the price levels etc. Ideally this step is done in close co-operation with the local fleet manager and/or HR manager to get the buy-in and support.’

She adds: ‘International lease providers are also able to help you throughout the entire process beginning at the due diligence phase. They can do some benchmarking for you and help you select the appropriate cars, set the right budgets and oversee the fiscal implications of your car policy. On top of that, the international entity of the leasing company, such as LeasePlan International, can help you manage the entire process from a central point of view by giving strategic advice, helping you with the international harmonisation and the implementation and follow-up.’

International fleet consultancy Fleet Vision says it’s noted three factors that are key to successful roll-outs to new operations:

1. Flexible but robust global car policy
2. Experienced change management
3. Board level support

Hans Damen, managing partner global, comments: ‘Global policies should be designed as a blue print with the ability to swiftly apply to new markets and operations. It is therefore important that the overall framework represents the right balance between strategic views and operational detail. A clear distinction of what should be agreed globally and what locally is eminent. The model that FleetVision applies is a modular approach that allows central management, facilitates local specifics and improves driver accountability. It is an umbrella agreements that is designed to include annexes to specify local or entity requirements.’

He adds that operators should ensure that key areas of change management are covered by answering these questions:

• What are the clear and compelling reasons for adopting this policy change and is it supported with objective data?
• Do we understand the motivators for each stakeholder group and are all policy stakeholders engaged?
• Do stakeholders take ownership of the policy change and do they communicate well to lower levels of the organisation?
• Do managers and supervisors lead by example?

Of course, as with any changes, there is likely to be some opposition from employees on a local level. Mr Damen says: ‘As with every change, there will be pushback. It is not uncommon that such an emotional topic as a (global) car policy will eventually appear on the radar screen of your global board members. This depends of course on the country or entity manager and his or her willingness and ability to raise their objections at the highest level.

‘Having a sponsor in your board that understands the global policy and the strategy and numbers behind it, before objections are raised, is therefore of key importance. Ensure that this sponsorship is established before your rollout.’

So how quickly can a global fleet policy be rolled out to new operations?

Mr Damen says: ‘We have seen implementation timelines between 4 and 18 months, all depending on the areas highlighted above. And in some cases, it never came to an implementation…’

Time to take stock of changing requirements

Whilst expanding a global fleet policy to take in new operations can be problematic, it can represent a good opportunity to re-evaluate and, if necessary, update your existing policy in line with development requirements – as well as gain benefits through increased efficiencies.

That’s the view of Dr Nancy Storp – head of international sales and marketing of Alphabet International.

She comments: ‘As in many enterprises, the necessity to save costs, fuelled in part by the world economic crisis, has intensified the trend towards globalising management of fleet operations. A global strategy can indeed allow companies to increase transparency and efficiency across the board and, as a result, reduce the number of suppliers worldwide and streamline the brand portfolio. As new operations in different markets are integrated into a central approach, however, a global fleet policy overall must keep pace and be adapted. This challenge can be met by careful preparation.

‘For companies with a centralised structure, a harmonised car policy is a fairly accessible option. Globalising operations demands a great deal of top-down attention and backing, so ensuring management buy-in right from the start is imperative. Another priority – and pre-condition – that needs to be fulfilled is the elaboration of a transparent and taut project plan. Goals must be clear and realistic, the roles of the various actors described and assigned, and processes must be systematically planned.

‘Fleet management, of course, will be both support to and subject of the company’s overall strategy hence ideally its goals must be aligned with the company’s overarching goals. In addition to cost savings, these might involve such topics as reducing a fleet’s carbon footprint, enhancing employee motivation, or even facilitating smooth processes within the customer’s value-added chain, for example with service fleets.

‘An area that requires particular attention as well is the heterogeneity of a global fleet operation. Local fleet managers must be addressed and integrated into the globalisation process and the project organisation right from the start. This must be done with care and respect as customs and structures are different from one country to the next. A related challenge that must be considered when harmonising international car policy is the plain fact that company cars are not always treated the same way across Europe. Prices, taxation, perceived value, brand image and attitude towards the environment all vary from one country to the next. Hence, when developing an internationally oriented strategic plan, it is always important to work in some leeway for national aspects, and hence secure buy-in from individual countries as well.’

Communication is also a key ingredient of the successful harmonisation of a car policy, and Dr Storp has some advice here too: ‘All players, too, including customers and staff members, must be kept informed throughout the implementation and roll-out process to maintain positive attitudes, hence a communication component must be included into all projects or initiatives, for instance in projects related to corporate social responsibility.’

She adds: ‘Once the goals have been established and all players are on board within the company, the final task can be approached, namely harmonising the car policy with the customer’s wishes. If the groundwork has been carefully laid, the new car policy will in fact represent measures to reach the strategic goals and whose impact can be controlled by tracking the key performance indicators.’

Having worked through this whole approach and set the foundations to integrate new operations into the globalisation process, fleet can then look to reap the benefits from a policy that enables economies of scale without restricting local flexibility too much. Of course, the fleet team will then need to monitor KPIs and provide regular communications with individual countries to ensure all commitments are met – but that’s a topic for another time.