Furnman Selz Case
Global Human Resource Management
Case Study
Furman Selz LLC (A): A Tale of Two Acquisitions
1. What problems are Furman Selz and ING facing in December of 2000?
In 1997 ING Barings acquired Furman Selz for $600 million in a purchase that was labeled as a “match made in heaven”. Although the basis for this company’s evaluation was quite optimistic, both parties believed in the significant future synergies between the two companies. However, a few months after the acquisition, differences between the two started to surface.
ING installed Fernando Gentil to run the new company ING Barings Furman Selz together with Furman Selz’s Chairman Edmund Hajim. Gentil applied ING’s vision of becoming the leading financial services company and hoped for the ING Barings Furman Selz to become one of the top players in investment banking. This was further supported by the ING parent company in a meeting where they set the goal of moving ING Barings Furman Selz from current lower ranks (15th or 17th position) to a top 7 position. All this should be achieved without further investment but just by leveraging synergies, which in Hajim’s opinion was impossible and led to confusion among Furman Selz employees.
Another issue occurred when ING informed Hajim about the planned tight integration of Furman Selz into ING Barings’ New York operations. This came as a surprise, as Hajim believed that during the acquisition talks both companies agreed for Furman Selz to remain independent. In his opinion the move was disadvantageous as the ING Barings’ overhead costs were well above those of Furman Selz and his company had a different structure of measuring success. Albeit his objections, Hajim eventually agreed to the move but subsequently withdrew from the leading role and let Gentil take over more responsibilities. ING’s non-cooperative behavior here could have also be foreseen earlier when they invited Hajim to Amsterdam right after the acquisition but
Case Study
Furman Selz LLC (A): A Tale of Two Acquisitions
1. What problems are Furman Selz and ING facing in December of 2000?
In 1997 ING Barings acquired Furman Selz for $600 million in a purchase that was labeled as a “match made in heaven”. Although the basis for this company’s evaluation was quite optimistic, both parties believed in the significant future synergies between the two companies. However, a few months after the acquisition, differences between the two started to surface.
ING installed Fernando Gentil to run the new company ING Barings Furman Selz together with Furman Selz’s Chairman Edmund Hajim. Gentil applied ING’s vision of becoming the leading financial services company and hoped for the ING Barings Furman Selz to become one of the top players in investment banking. This was further supported by the ING parent company in a meeting where they set the goal of moving ING Barings Furman Selz from current lower ranks (15th or 17th position) to a top 7 position. All this should be achieved without further investment but just by leveraging synergies, which in Hajim’s opinion was impossible and led to confusion among Furman Selz employees.
Another issue occurred when ING informed Hajim about the planned tight integration of Furman Selz into ING Barings’ New York operations. This came as a surprise, as Hajim believed that during the acquisition talks both companies agreed for Furman Selz to remain independent. In his opinion the move was disadvantageous as the ING Barings’ overhead costs were well above those of Furman Selz and his company had a different structure of measuring success. Albeit his objections, Hajim eventually agreed to the move but subsequently withdrew from the leading role and let Gentil take over more responsibilities. ING’s non-cooperative behavior here could have also be foreseen earlier when they invited Hajim to Amsterdam right after the acquisition but