Furnman Selz Case
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 …show more content…
Another difference between the cases lies in the anticipated return from the acquisition on both sides. Xerox, on the one hand, enabled Furman Selz to grow and increase its book value by providing capital and the prominent name. In the case of the ING acquisition, on the other hand, Furman Selz expected a global reach as well as (increased?) capital. However, ING was not willing to invest (more) in the company but was expecting high growth rates. With the lack of both input from ING and higher growth rates from Furman Selz, expectations could not be met from both sides, in contrast to the acquisition by Xerox.
During the integration process several changes had to be made, since ING was a commercial bank and insurance company while Furman Selz was an investment bank. As a consequence, the two companies had a completely different management style and structure, and adaptations had to be made regarding