Published
in The Daily on March 19, 2009
Integration
Message From Adam Schechter
Dear
Colleagues,
The
recent announcement of our plan to merge with long-term partner Schering-Plough
is an exciting event in our company’s history. We now face the challenging work
of planning for the integration of the two companies. I want to tell you about
the Integration
Team we are forming, the process the team will follow and what to
expect in the coming months.
The
Integration Process
Integrating
two large companies is a substantial undertaking and one that will eventually
touch every part of the combined organization. But at the same time, we have a
business to run and commitments to deliver. That is why one of the principal
goals of the integration is to bring our two companies together as quickly as we
can, and to do so in a thoughtful, deliberate and collaborative
manner.
To make
sure this happens, we have outlined a four-phase integration process. The phases
flow logically from one to the next, and are organized around the key activities
and milestones that we need to achieve between now and the close of the
transaction. We are approaching the integration in a way that will ensure we
begin operating on Day 1 in the strongest of positions. While the integration of
the two companies will take place after the transaction's close, it is
imperative that we ready ourselves to immediately reap the benefits of our
combined strengths once we are one company.
The First
Phase — Mobilize — is where we are right now. We are building the
teams that will lead the integration work and setting the targets the
integration effort is designed to achieve. This phase will run through April 6,
when we formally launch the integration teams staffed by Merck colleagues and
their Schering-Plough counterparts.
In Phase
Two — Plan — we will develop strategic plans for the integration
of our companies in a way that ensures we increase the value inherent in the
combination. We will do that through identification of enhanced revenue
opportunities, financial and operational synergies and other means. We will also
develop the specific plans we must follow to ensure we capture these
opportunities.
In Phase
Three — Lock-in — we will begin gaining approval of our
implementation plans as well as the specific functional and divisional plans
that we will put into effect on Day 1, the day when Merck and Schering-Plough
become one company.
Finally,
in Phase Four — Implement — we will start executing on our plans,
first to start operating as one company and then to deliver value to our various
stakeholders. It is during this phase that many of you will begin to see and
feel what it is like to begin to do business as the new Merck.
These
phases will occur at differing intervals over the next few months. Our goal is
to close the transaction in the fourth quarter of this year.
The
Integration Team
Developing
the right road map for merging our two companies is critical. Of equal
importance is forming the right team of professionals dedicated to this effort.
The Merck Integration Management Office (IMO) is the governing body that will
recommend and guide all major integration decisions. The Merck IMO will work
closely with an integration team at Schering-Plough led by Brent Saunders
(Senior Vice President and President, Schering-Plough Consumer
Healthcare).
The IMO
will consist of the following individuals:
Gary
Rosenthal, Senior Vice President, GHH Finance, will be responsible for leading
our efforts to capture the maximum value from the merger as well as managing the
overall integration program and its associated risks. Gary will also lead
coordination across those teams with integration responsibilities, ensuring we
successfully manage our interdependent work.
Kristina
DiPalo, HR Communications Leader, Global Communications, will lead
communications for the integration, ensuring that we are communicating
frequently, effectively and consistently across all our various internal and
external stakeholder groups. She will coordinate this work closely with the
Global Communications Leadership Team.
Melissa
Manion, Divisional HR Leader, GHH, will oversee the organizational design of our
combined company, playing a key role in the talent selection and retention
process. She will also help ensure we are making the right choices about the
direction of our corporate culture going forward. She will coordinate closely
with the Human Resources Leadership Team.
In
support of the IMO, and equally critical to the success of the integration, are
the teams that will support the functions and divisions in merging their
operations. Each of these groups will be responsible for managing important
integration-related issues and plans in their areas of expertise and will
coordinate and work with the IMO. These teams will be led by the following
individuals:
● Value
Capture Team — Alex Nisita, Senior Director and GFTI Lead
●
IT/Shared Business Services Team — George Llado, Executive Director, Human
Health Information Technology
●
Global Procurement — Mark Scheftel, Executive Director, Global
Procurement
●
Facilities — Roger Humphrey, Executive Director, Facilities
Management
● Human
Resources — David Howe, Divisional HR Leader, MMD
●
Finance — Jim Slyfield, Global Controller, Merck/Schering-Plough
Partnership
●
Legal/Communications/Policy — Lauran D’Alessio, Managing Counsel,
Corporate Development, Licensing & Joint Ventures
●
MRL — Linda Schaffer, Vice President, MRL Scientific Integration
●
MMD — Larry Naldi, Senior Vice President, Strategy &
Integration
● GHH —
Jay Galeota, Senior Vice President & General Manager, Diabetes &
Obesity, GHH
●
Animal Health and Consumer — Kyle Tattle, Executive Director,
Strategy Development Group
These
teams are charged with engaging their respective organizations during the
integration process. All integration-related work done on a division or function
level must be coordinated through them. [See chart.]
To
address the need to coordinate decisions and plans around the world, we will
rely on our Managing Directors to ensure we have comprehensive country and
region-specific plans in place. We expect this coordination to occur toward the
end of Phase Two, as we pull together our functional and divisional
plans.
The
Integration Team will be assisted at each level by counterparts from
Schering-Plough who will ensure we become fluent in our merger partner’s
business goals and objectives, as well as issues, as quickly and completely as
possible.
Over
time, we will reach out to many other employee experts within Merck and
Schering-Plough as we proceed through the process, and as different issues and
questions arise.
Moving
Forward
While the
Integration Team begins the process described above, the vast majority of you
should remain focused on meeting our commitments and delivering great results
for 2009.
As we
move forward on this exciting journey, we are committed to communicating
regularly and transparently. We will post our integration updates and
information regularly online and will also answer your questions as fully as we
can. For additional information outlining the integration process, click here.
I look
forward to working with many of you in the months ahead and to our collective
efforts in creating a new, global healthcare leader.
Sincerely,
Adam
Schechter