GE Citizenship

Acquisition Integration Framework

Acquisition integration is a process of preparing for and assimilating a newly acquired company or portfolio to ensure the acquired business will meet the growth and net income potential expected. The acquisition integration framework model is one of the useful tools for successful post-acquisition integration.

Preparation and evaluation

The AIF is executed over three principal phases of the integration:

1.  Pre-Agreement Phase

• The first step of the compliance integration process occurs even before the letter of intent is signed.
• A high-level risk assessment is developed, which identifies the target’s most significant compliance risks and drives the prioritization of due diligence efforts.
• The integration team maps the business core processes compiles a list of compliance requirements linked to the core processes, and creates a prioritized list of compliance requirements.

Due diligence and negotiation

• In the due diligence phase, the compliance integration team assesses the target’s integrity culture and compliance infrastructure.
• The objective of the due diligence phase is to produce a gap assessment, which analyzes the essential differences between GE’s compliance culture and the target’s. A comprehensive mitigation plan is developed to address the identified gaps.
• The GE Compliance Due Diligence Checklist Tool provides a detailed road map to guide the due diligence team.

Detailed integration plan

2.  Pre-Closing Phase

• In the pre-closing phase, a task-based plan is developed to build and maintain an effective compliance culture that prevents, detects and responds to violations of GE’s The Spirit & The Letter and applicable laws and regulations.
• The plan is tailored to the risks identified during the due diligence process and includes prioritized tasks and deadlines, assigned owners and abatement plans for identified risks. The resulting task-based plan will become the integration road map for the integration team.

Identify compliance integration resources

A successful compliance integration depends on allocating appropriate resources to effectively build the culture. The following resources are essential:

• A compliance integration leader
• A compliance leader (either fully or partially dedicated to the business, depending on the size of the acquisition)
• A Compliance Review Board, which consists of the business senior management team, to act as a steering committee for the business
• Ombudsperson
• Policy owner for each compliance policy, and key regulatory risks
• Compliance owners at remote sites (for businesses that have multiple sites that are geographically dispersed)

Implement compliance infrastructure

3.  Post-Closing Phase: The 100-Day Compliance Integration Plan

• GE employs a 100-day compliance integration plan, typically administered by a dedicated integration leader, to assure that the acquisition is brought in line with GE’s compliance culture, applicable laws, regulations and policies at the earliest possible stage.
• A critical aspect of the 100-day plan is communication and training of acquisition employees to promote employee awareness, commitment and knowledge about GE’s integrity culture. In-person training sessions, communication from senior leaders, distribution and acknowledgement of GE’s The Spirit & The Letter handbook, integrity videos, and guidance on how to raise integrity concerns are all part of a “day one” priority emphasis.
• Ultimately, the 100-day plan is not an end in itself, but a process to ensure that the newly acquired business has the right foundation to build and maintain a robust compliance culture.