Handling Mergers and Acquisitions Strategically

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.”