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Posted by Jost Hoppermann on February 9, 2012
Less than a week ago, initial information became public that Misys and Temenos may intend to merge. On February 7, 2012, a press release stated that “Temenos and Misys today confirm that they have reached agreement in principle on certain key terms and are in continuing discussions regarding a possible all share merger of the two groups.“ Now Misys and Temenos have about one month to finalize their merger — or abandon it. It is obvious that this merger has the ingredients to become one of the most significant mergers in the banking industry in the past few years. With the probability of the merger now sufficiently high, here is my initial take.
There are two obvious reasons for this potential endeavor of Temenos and Misys (let’s call the combined company MIsys-TemeNOS [“MiNos”] for the time being to avoid terms such as “new company” or “NewCo”):
However, there are also a number of risk factors:
Right now, it is way too early to judge whether the (at this time still potential) merger will become a success. There are way more questions than answers. It is obvious that “MiNos” will need to define and communicate concrete road maps for the joint product portfolio to retain its existing customers and avoid any perception of risk as far as the future of the individual solutions — and thus also targeted customer groups — are concerned. Both companies are very experienced in integrating acquired companies. However, this may be exactly the risk when it comes to a merger of shares between two firms of comparable size and standing.
If you are currently working on selecting a new banking platform for your bank, watch the ongoing developments carefully to be in a good position to mitigate selection risk. Do you see the merger as a benefit or a risk for your ongoing projects — in terms of, for example, targeted customer groups, your solution portfolio and road map, available functionality, solution architecture, and well-tuned delivery capability? As always, I am interested in what you think: JHoppermann@Forrester.com
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