Inside Supply Management Magazine

Handling Mergers and Acquisitions Strategically

May 17, 2016

Merged Fortunes: Integrating Separate Procurement Organizations

ISM2016 session on Tuesday, May 17

Presenter: Cathy Herr, senior director, global procurement, Elanco Animal Health, Indianapolis.

Mergers and acquisitions can be hostile or cooperative, and can differ in size, ranging from a product acquisition in which business continues as usual to merger with a large company, which usually results in disruption, Herr says.

She has experienced numerous acquisitions at Elanco —since 2007, the company, a division of Eli Lilly, has been in acquisition mode, most recently acquiring Novartis Animal Health, a Swiss company similar to Elanco.


Key takeaways

When integrating an acquisition, companies need to:

Understand the situation — Consider the employees involved and the acquired company’s culture, atmosphere, policies and employees affected.

Collect as much data as possible to gain as complete as possible picture of the company. This data can include spend data and contracts.

Consider staffing strategies. Look at value opportunities, where overlaps occur and whether you should reduce staff or stay the same.

Define your integration strategy — whether you should integrate immediately, in waves or never.

Create a vision and culture for the joined company going forward. What do you want the company to look like in a year? What about three years?

Map out what you want.

Make sure you communicate.

Other considerations:

People are your most important asset

Have an open mind: Realize that your practices may not be the best way of doing things

Realize that there will be “realities of integration.” Because operating styles and culture differ, they may be disruption.

Key quote: “You have to learn to thrive in that chaos.”