Understanding company targets, being prepared to execute on goals quickly and choosing the best talent can mitigate stress and deliver value during a merger or an acquisition.
By Mary Siegfried
After the announcement that Shire plc, a global biotechnology company, planned to acquire Baxalta Incorporated, Stephen Listzwan, head of procurement at Shire, vividly recalls “nervously high-fiving” members of his leadership team. A supply management professional who has lived through a merger or an acquisition can relate to those mixed emotions. That’s because an M&A offers procurement organizations unique opportunities — with intense pressure to perform.
As Listzwan explains, “We knew the business integration would double our external spend, which was a great opportunity for us to deliver value to the company. At the same time, there were high expectations to deliver synergy from the deal.” Such expectations and opportunities are among the reasons supply management professionals should understand the dynamics of an M&A because it likely will affect them at some point in their career.
Calling the M&A market “healthy,” an April 2017 report by Ernst & Young notes that while technological and digital disruptions are major drivers of M&A, “geographical expansion to secure supply chains and increase customer reach will accelerate cross-border M&A.”
Understanding the M&A Landscape
There are many issues a supply management professional must tackle during the M&A process, and being aware of best practices in advance is helpful during the stressful transition. K.O. Ansa B. Yiadom, senior director, global procurement for Pfizer Inc., understands this from experience. “I have been on both sides, and I can say that it’s an unsettling feeling when your company is being acquired,” Yiadom says.
He characterized the goal of an M&A as “taking 1 plus 1 and making it 3, 3.5, etc.” Thus, he says, there’s a great deal of pressure to hit targets as well as achieve intended goals.
To understand the role supply management can play in meeting M&A goals, it’s important to first study the “landscape” of the acquisition. “Understand the company’s short- and long-term targets related to the acquisition,” Yiadom advises. That can be done by participating in analysts’ calls, talking with leadership, and reading about what investors expect from the M&A.
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