Please read the case and answer the 2 questions at the end of the case as thoroughly as possible.

PRELUDE TO A MERGER: Metropolitan and Momentum were two of South Africa's top financial services companies. Metropolitan began as African Homes Trust in 1898 to help low income earners build their own homes, and few companies had a history that so closely mirrored the progress of South Africa and its people. In 1912, African Homes Trust took over an insurance company and in 1985 changed its name to Metropolitan Life. Life insurance was its primary product, sold through mass-market agents to primarily entry-level and middle-income markets. It was highly efficient at processing new business accounts, serving clients, processing claims, and generally administering its policies. Metropolitan had sufficient scale in terms of the number of public and private sector clients in retirement fund administration to provide them with scale benefits and thus the ability to price competitively. It was also the leading player in private (closed) healthcare solutions administration. Metropolitan was proud of its special emphasis on designing products for those who had previously, especially during the Apartheid years, been unable to participate in long-term savings. In the nineties, Metropolitan expanded to Namibia, Lesotho, and Botswana, and in 2006 they acquired a 60% stake in a Ghana insurer. In 2010, Metropolitan had 5,500 people and a market capitalization of R9 billion. Momentum, on the other hand, was a progressive company established in 1966 as "Afrikaanse Verbond Lewens" (meaning "Afrikaanse Life Bonds" in Afrikaanse, one of South Africa's official languages). It acquired Monument Assurance in 1973 to form Momentum Life. Rand Merchant Bank Holdings (RMBH) invested in Momentum in 1992 and its growth benefited from a strong focus on middle and affluent market segments. In 1998, RMBH created FirstRand Limited, the largest financial services company on the JSE. Momentum had 9,000 people and a market capitalization of R16 billion. It had strong products in open healthcare solutions administration and umbrella retirement funds, both distributed through a strong broker channel. Momentum's life insurance product, Myriad, was a market leader in the industry due to its comprehensive coverage. In 2010, Metropolitan and Momentum faced similar challenges. Looking for growth, each firm had developed insurance products aimed at the markets where the other was strong, and each had struggled to gain share. Momentum's Aspire product struggled to penetrate the lower income market while Metropolitan's Odyssey Life Insurance product for the upper income market was unable to gain traction. Both organizations started looking for corporate transactions as solutions to bridge these gaps. The Case for Change: The merger committee consisted of balanced representation of executive and non-executive members from both companies, including the CEOs of both companies, the Chief Financial Officer of Metropolitan, the Chief Operating Officer of Momentum, and so on. The merger committee's mandate was to formulate a clear business case for the boards. It became an important reference point in directing decision-making. Whenever there was a question or choice, the team would invoke "The business case must prevail" rule. In a time of great uncertainty, it offered direction and clarity. The core of the business case recognized the complementary product lines and markets served. In addition, there were revenue and expense synergies to gain by integrating certain back office functions. For example, Metropolitan ran a lower cost health care insurance administration business than Momentum. On the other hand, Momentum had access to FirstRand's Rand Merchant Bank (RMB) asset management business, which had a much stronger third-party client franchise and could improve efficiencies in Metropolitan's business. Finally, Momentum's health insurance business and Metropolitan's life insurance business were well represented throughout Africa. Any regional expansion strategies into Africa would thus be complementary. The business case also helped the merger committee to focus on MMI's long-term strategic direction, especially in the face of the immediate pressures for cost-savings. An organization development consultant, Dr. Francois Hugo, facilitated some of the discussions to resolve differing views and offered input on building trust under conditions of uncertainty and conflicting perspectives. During several important decision points, the team members had to put the envisaged company's combined interest ahead of their own company's interest or their own individual interest. Nonetheless, there were still a number of occasions when the two parties had dissimilar views that could prevent the deal from going through. An important point of contention early in the process was deciding on the combined entity's brand. Design consultants, for example, suggested names that combined parts of the two client-facing brands, like Metrum, Magma, Meridium, and Emminent. Eventually, an agreement was reached with the name MMI. MMI was positioned as the investor brand, while the strong and trusted brands of Momentum and Metropolitan would be used in client-facing businesses. This decision reflected the strong belief that the financial value of the merger would be maximized by leveraging the Metropolitan and Momentum brand names. THE INTEGRATION PROCESS: The positioning of the transaction as a merger rather than a takeover was important in retaining key customer groups and talented employees from both organizations. However, while Momentum had more experience acquiring other companies, such as Lifegro, Southern Life, and Sage Life, this was its first true merger. The idea of balancing representation on the board, as well as the executive committee and merger committees, made the process significantly more complex, and seeking consensus between the parties led to several iterations of decisions. Momentum's slightly larger embedded value resulted in 11 board members compared to Metropolitan's nine MMI board members. The chairperson was initially from Momentum, but there was an agreement that after one year, he would step down and the Metropolitan chairperson, J.J. Njeke, would become chairperson of the combined entity. Despite these efforts, some financial analysts, such as Tim Cohen of Business Day, questioned whether a true merger was possible. He insisted on calling it a "soft takeover." Early in 2011, the two companies' executive teams were combined to form a new structure. The different cultural approaches in Metropolitan and Momentum became even more apparent during this time and required rigorous debate to reach compromises. The intent of achieving cost-savings through synergies, while retaining the best of both organizations, required consultations and meticulous attention to creating space for both organizations to be heard. At times, the extensive consultation to ensure fairness in decision-making solved the integration process down. Kruger commented: "We learned early in this merger process that the soft people issues were actually the hardest to deal with. There were a few months just prior to the merger where the senior executive roles in the new structure were not yet final. This difficult time experienced by executives gave us more empathy with what our staff were going through during the merger process." As Nicolass Kruger, Momentum's former CEO, was appointed to the group CEO position, Metropolitan's former CEO, Wilhelm van Zyl, was appointed as deputy group CEO. Kruger was responsible for Momentum's and Metropolitan's retail businesses as well as the group-wide support functions. Van Zyl was accountable for Metropolitan Health, Momentum Investments, Metropolitan International, and Momentum Employee Benefits. The rationale for the new structure was to offer equal representation for both companies, and this structure purposefully balanced power between the two former CEOs. Moreover, a divisional structure made sense because the combined entity was too large for a functional structure and a matrix structure would have been too complex in the early days of the combined entity. All executives were strong proponents of the long-term envisioned benefits of the merger and repeated the benefits to staff regularly. Leadership purposefully demonstrated their commitment to the merger by being highly visible and accessible during this period of uncertainty. Formulating Integration Plans: Following the merger's approval, the merger committee became responsible for finalizing the due diligence process and establishing an integration program to manage the transition with a project approach. The composition of the merger committee was adjusted and comprised two non-executive board members from each company, including the CEOs. Johan Burger, representing Momentum's board, served as the committee's chair. The merger committee had several debates to make a clear and common picture of the future that resulted in a jointly formulated vision: "We will be a leader in meeting financial services needs. We will meet clients needs by providing a range of appropriate, value-for-money financial solutions in our market segments." The finalization date of the MMI Group strategy was February 2011. The merger committee, in turn, appointed working groups to flesh out the details of the merger process. Danie Botes was appointed as the MMI chief integration officer to coordinate this process, based on his first-hand change management experience in the Sage and Southern Life integrations. One group, for example, focused on the integration of people processes and IT platforms. Other working groups paid attention to the combined organizational structures for the investments business unit, the international businesses, employee benefits, and the health care administration business units. Structures for the lower income market life insurance business, called the emerging market retail division, and the upper income market life insurance retail division were also developed with equal representation from both organizations. Using working groups comprising both Metropolitan and Momentum employees increased understanding of each company's realities and aspirations. The merger committee also retained a strategy consultancy that had worked in both organizations. The consultancy had central oversight and was ideally positioned to facilitate the working groups which utilized an inclusive bottoms-up involvement process to formulate the implementation plans. Together, they developed strategies and integrations plans that were presented to the merger committee for approval. Following approval by the merger committee, the working groups proceeded to implement their plans, taking into account top-down guidance from the merger committee. Another important role of the merger committee was coordinating the communication of integration plans. For example, the two CEOs would formulate their communication messages and confirm consistency of messaging with each other prior to sending out combined media releases or external communications to shareholders, as prescribed by the JSE. Internal communications were also sent out by both CEOs, making sure the employees of both organizations received the communications at the same time. This enabled consistency in communication and prevented, to some extent, rumors in both the Gauteng and Western Cape provinces. These communications were out weekly to instill trust in leadership. When there was lack of progress, the CEOs gave honest feedback about unresolved issues and planned corrective actions. In one of the first coordinated communications efforts, the newly formed executive committee in 2011 acknowledged that it would take a couple of years to bridge the vast differences in culture between the two organizations. A Client-Centric Design: The executive committee introduced a major organizational redesign to support MMI's client-centric strategy in 2014. The reformulated strategy demonstrated a significant move away from a product focused and sioled set of businesses. To support the new strategy, the executive committee proposed an operating model with a new client engagement solutions group at the centre of the design. With the support of the centres of excellence, the client engagement solutions group supported all segments and channels by developing engagement tools to enhance client experiences. This operating model was designed to optimize the execution of MMI's client-centric strategy. Segment and channel businesses used their intimate understanding of clients to build financial wellness client value propositions. The value propositions would use client engagement and experience tools designed by the client engagement solutions business, as well as products by MMI's centres of excellence. Group-wide functions supported the entire organization. The MMI executive team consciously followed a phased approach to the merger integration. They wanted to take employees with them on the journey and sometimes had to wait for the right time and opportunity to integrate a further aspect of the organization. Cultural Integration Interventions: By 2015, Dr. Marlene Dippenaar, an internal organization development consultant, was asked to head up to the cultural integration process. She realized that the Group CEO and executive committee were invaluable in understanding the requirements of cultural change and demonstrating their commitment to the process. During an executive team two-day breakaway, the executive committee acknowledged the cultural heritages of the original organizations and considered which aspects they wanted to retain. It was important for the executives that the aspired MMI culture would support the strategic direction of the organization. They confirmed that the six values created earlier would be important enablers of living MMI's financial wellness purpose going forward and formulated specific behaviors that would characterize each value. They created a unifying narrative called The MMI Way to explain examples of the behaviors associated with each value. The executive committee asked Blueprint Consultants from Canada to conduct a values assessment to establish the gap between the current and desired observed behaviors. The feedback revealed each business unit's performance on these values and action plans were formulated to bridge the gap in each area.

Answer the following questions as thoroughly as possible: 1) Considering all the factors that drive successful merger integrations, what aspects of the MMI merger were effective and why? Be as specific as you can. 2) Was there anything ineffective about the merger?