Management consultants are famous for coming up with figures showing how many mergers fail.
Usually it amounts to more than half. That's why there was scepticism about the merger of Banco Santander and Banco Central Hispano in early 1999. Would it create more problems than gains?
A year and a half later it's becoming clear that the Spanish can teach the world a thing or two about mergers. Modestly, they retort that it was the direct experience of going through bad ones - the merger of Bilbao and Vizcaya in the 1980s being the prime example - that showed them how to do it right. BSCH wins the award for putting together its two halves so quickly and successfully and increasing profits 26% in the process. The resulting bank is Spain's largest and the sixth largest in Europe by market capitalization.
There seem to be four major lessons of the BSCH merger: conduct the negotiations as rapidly and as secretly as possible; have agreement on who will occupy the most senior positions before the merger is announced; adopt a multi-branding strategy that prevents customers from being alienated while still allowing for cost cuts; keep the bank outward looking even while the merger is in progress.