Another day, another takeover (or merger)
It seems every day brings news of another company takeover or merger.
Earlier this week Australian health information company IBA Health bought the iSoft software company, valuing it at £140 million.
Today we hear that Germany’s HeidelbergCement has snapped up Hanson, one of the world’s biggest conglomerates, in an £8bn purchase.The last issue of SM looked at the impact of supplier takeovers or mergers on customers, with the increase in size often leading to more variety of products but the merger process itself sometimes disrupting the buyer-supplier relationship.
But what about the effect on the procurement departments in the merging companies? How can purchasers prepare for the change and minimise upheaval? What are the first steps to take?
ABN Amro has been at the centre of one of the biggest ever banking takeover battles for some time, but does such forewarning really make it easier for procurement departments to prepare for the seemingly inevitable?
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The first question to ask is what supplier side and organisational synergies could be achieved following a merger? From an external perspective, if there are common suppliers there should be an opportunity to leverage the combined buying power.
This is also a great opportunity to trim the fat from key processes pre-merger. You may not have the time or money to roll out a new online sourcing system but you can be proactive in your planning. Developing a roadmap of what and how you would like to change, can give you the upper hand post-merger.
Finally, carry out a risk assessment to identify what type of reputation the other company has amongst your supply base. Are your strong relationships with key suppliers likely to suffer as a result of the merger?”