Nadine Thouin

Comp & Ben, a key player in mergers and acquisitions

Interview with Nadine Thouin, Group compensation and benefits director, Suez
 

Hello Nadine, could you tell us about your career path?

I graduated from Concordia University in Montreal in actuarial mathematics and am a former member of the US Society of Actuaries and of the Canadian Institute of Actuaries.
I joined Suez in 2018 to support the group with its management of international benefits, just after Suez acquired an entity of 7,500 employees across 75 countries.

Before joining Suez, I worked for 15 years as a senior international consultant at WTW in Montreal and in Paris, and for 8 years as sales and marketing director at Planet Hollywood Paris.

In February 2022 I was appointed group C&B director in the post-takeover context. Veolia made a takeover bid for Suez in 2021, then we sold a 40% stake to a consortium of investors to avoid a monopoly, giving rise to the “new Suez”, a private company. It was in this more than challenging context that I took on my role and worked to ensure that all staff maintained the same level of benefits, while making the new value sharing model offered by the shareholders accessible.

Among my achievements are the Go Suez employee shareholding plan, set up in 2022, making it possible to recycle the former plans that ended with the takeover bid. It was an immense challenge, in its complexity, in the context of a private company, but also an unprecedented success with record participation within the group. Moreover, this is Suez’s first employee shareholding plan as a private company - an achievement recognized by the Observatoire Rémunération et Avantages Sociaux, which awarded us a trophy.
 

How did you get involved with M&A operations?

It all started when I was a consultant at WTW. One of our clients, Coty, had just acquired an entity bigger than itself (P&G Beauty, present in 70 countries). In my role as an actuary specializing in international benefits, I was seconded for a year to assist this client with integrating all the newly acquired entities. Notably, I was tasked with converting several expatriation contracts into local contracts. Knowledge of benefits in each country was key to this role, as was the coordination of several stakeholders (HR directors of subsidiaries, actuaries, tax specialists, lawyers, etc.). 

On returning to WTW, I was recognized as an M&A go-to-person, and it was only a few weeks before I was asked to support Suez following the purchase of GE Water (7,500 employees across 75 countries) as a project management officer for the HR business line. Suez wanted to diversify and acquire greater expertise in water treatment for companies, which is what led to this takeover project. It was a real challenge, as at this time Suez had over 90,000 employees across 60 countries, and as new arrivals sometimes worked in small companies, or were located in countries where Suez did not have operations.
 

Can you tell us what contributions are expected of Comp & Ben in M&A operations?

First, we should remember that there are several phases to an M&A project, some of which can require assistance from a C&B professional.

One of these phases is due diligence, which takes place before the purchase and aims to allow the potential buyer to confirm or reassess the value of the target company by undertaking a detailed analysis of the company’s financial information, assets and liabilities, clients, human resources, etc. 

It is not uncommon for M&A teams to contact C&B in this case, as sometimes the target company might have debts related to benefits that only an experienced C&B professional can spot. I remember the case of the acquisition of an entity in Germany that included a defined-benefit pension plan, the provisions for which were very substantial, but not immediately obvious. In addition, it was impossible to cancel them due to applicable collective agreements. The purchase did not take place in the end due to this analysis.

Another analysis carried out by C&B during due diligence uncovered a document that mentioned that a class action was ongoing on the part of the employees, who considered that they had lost out after investing their supplementary pension contributions in company shares. As the share value had plummeted, the employees had brought a class action arguing that the company had offered poor advice. Several millions were at stake. The involvement of C&B allowed the deduction of this amount from the purchase price.

Once due diligence is completed, and no major problems or points of concern have come up, the next stage is the execution of a definitive contract of sale and the setting of a closing date.

C&B’s help is valuable here too. I held the role of Project Management Officer (PMO) for the HR business line throughout this period. An integration team made up of representatives of each line (HR, finance, IT, tax, legal, communications…) met on a weekly basis. I had to take part in all meetings, manage monitoring of HR issues, country by country, as well as our schedule to day 1. 

I quite quickly realized that we could not work on HR integration until we had the deal in its final form, which was decided by the tax and legal teams. To put it simply, for the purchase of a company, the operation can be structured as a share deal or an asset deal. In an asset deal, the sale relates only to assets, with the exception of related liabilities, while in a share deal, the purchaser takes over the company with all its assets and liabilities.

But even once we knew the form that the deal would take, our work was not done, as we had to look at the legal structure of the entities purchased in each country. For example, sometimes employees worked for a GE Water entity (a direct transfer). But sometimes they worked with other GE employees in an entity that was not part of the purchase scope (so we had to do a carve out for these employees). Sometimes we had a Suez entity able to host them, otherwise GE or Suez had to set up a new entity. All this was managed by the M&A team with tax and legal specialists, but we sometimes suffered the consequences in HR. I remember the case of an entity that we had to set up in China to host employees from GE. To do so we had to amend their employment contract, stipulating the name of the new host entity. However, the amendment meant that the employees were entitled to refuse this new contract and in this case, Suez was required to pay severance. Our HR teams therefore worked with employees and did a lot of communication, which avoided mass resignations.
 

What skills does all this require?

Speed: For the acquisition of GE Water, Suez made its bid in February and was successful in March, when I was asked to join the project. Further, the closing date was scheduled for July and we therefore had 3 months to get organized and prepare everything before day 1. We didn’t have a minute to lose!

Agility: The allotted time for this operation turned out to be too short for all sorts of reasons beyond my control. As a result, the closing date was pushed back twice and ended up being 1 October. As I was overseeing each country’s HR team, I had to review the plan and juggle the different deadlines several times.

Organization: To be effective, you have to be organized. And to be organized, what could be better than a detailed knowledge of your own company’s packages and benefits. I realized this at my own expense at the start of the project. The company that we were purchasing quickly provided me with a very detailed report of the benefits in place for each country as they had implemented a centralized online solution to perform audits and keep records some time ago. Ironically, the difficulties came from my end, as there was no such centralized tool. We had to investigate with our subsidiaries in record time to obtain the missing information.
 

What advice would you give a C&B professional who has to contribute to an M&A operation for the 1st time?

Be patient, Rome wasn’t built in a day. An M&A project can seem very intimidating at first. Several representatives from different departments meet regularly to raise a multitude of problems, often related to the form of the deal. You can quickly find yourself lost in all the new technical jargon; you ask questions without really being able to know if the issues raised by colleagues in other departments will actually affect yours. Don’t panic! I had the opportunity to discuss this with my colleagues once the project was over, and most of them said that they had no more idea than me to begin with. You have to persevere and feel free to call members of the M&A team or those from other departments to ask unanswered questions.

Also, don’t forget that it is an opportunity to learn an enormous amount about how a company operates, in particular the interactions between the various functions. This helps you take a step back in relation to your own work and get an overview.

In the end, this type of project allows you to maintain a trajectory and offer many sub-projects that can appear logical following an acquisition. For me, the acquisition of GE Water allowed me to continue the integration of a value capture project with identification of synergies between our benefits plans, with high-potential savings opportunities. It also allowed me to implement a group strategy for insurance pooling and a global benefits management structure, not forgetting the development of a group grading system. I would be pleased to talk more about all this in another interview!

About Suez: https://www.suez.com/en/about-us/group