The CEE Generics Pharmaceutical Sector: Ways to Minimise Cultural Heritage Barriers to Mergers and Acquisitions
Mergers and acquisitions (M&As), which became extremely common in the branded industry in the 1990s, have recently seen a parallel development in the generics medicines industry. However, generics M&As are more susceptible to impact from cultural barriers. These may become apparent post merger, but can also dramatically affect the success of the negotiations. The reasons for this are discussed and several proposals are made for risk reduction through recognising the importance of the culture differences in play and taking adequate measures to reduce their impact.
Making mergers and acquisitions work: What we know and don't know – Part II
This is Part II of a two-part paper that summarises what is known and not known about making mergers and acquisitions (M&A) work, and identifies best practices where appropriate. In Part I, which appeared in Volume 3 Number 2 of this Journal, the case for change was laid out. It was established that most M&A do not turn out to be successful. The experience of GE Capital and Cisco Systems, two companies that have successful track records was discussed. A systems approach was described, and a model for success was proposed in Figure 1. This model appears as Figure 1 of Part II for reference. This part discusses culture fit, structuring the integration team, leadership selection and integration issues. Taken together, the two parts of this paper outline the critical elements of a systems approach to making M&A work. Professional change agents and managers responsible for making mergers or acquisitions work will find that this paper will identify key levers for them to focus on as they go about the real work of making it happen.
Making the deal real: how GE Capital integrates acquisitions.
Most companies view acquisitions and mergers as onetime events managed with heroic effort--anxiety-producing experiences that often result in lost jobs, restructured responsibilities, derailed careers, and diminished power. Little wonder, then, that most managers think about how to get them over with--not how to do them better. But even as the number of mergers and acquisitions rises in the United States, studies show the performance of the resulting companies falls below industry averages more often than not. To improve these statistics, executives need to view acquisition integration as a manageable process, not a unique event. One company that has done exactly that is GE Capital Services, which has assimilated more than 100 acquisitions in the past five years alone and, in the process, has developed a formal model for melding new acquisitions into the corporate fold. Drawing on their experiences working with the company to develop the model, consultants Ron Ashkenas and Suzanne Francis, together with GE Capital's Lawrence DeMonaco, offer four lessons from the company's successful run. First, begin the integration process before the deal is signed. Second, dedicate a full-time individual to managing the integration process. Third, implement any necessary restructuring sooner rather than later. And fourth, integrate not only the business operations but also the corporate cultures. These guidelines won't erase all of the discomfort that accompanies many mergers, but they can make the process more transparent and predictable for those involved.