Change Management During Merger Integration:
Pharmaceutical
The Situation
A US headquartered pharmaceutical company decided to acquire a company with complementary products and a more promising portfolio of products in R&D. The deal was valued at $41.1bn and Post Merger Integration was carried out by a well known strategy house globally. The acquiring company's strategy had for years rejected non organic growth, so their experience in integrating two companies of broadly similar size was very limited. In the Asia Pacific Region both companies were of broadly similar size, however on a country by country basis, there was a significant disparity and occasionally the acquired company had a larger operation. Global regulatory concerns meant that no communication was possible between the companies before deal day; local integration was contingent upon local regulatory approval, which might take up to a year. There was a concern that the globally approved approach to integration was being communicated late. The project was based in Singapore.
The Approach
We were commissioned to work with the Asia Pacific Regional Team in assisting in the change management aspects of the integration prior to Deal Day. The initial analysis and design lasted 2 weeks based upon access to the deal handbook and a series of interviews with the acquiring company only (we were forbidden to approach the target company). We used our experience of Post Merger Integration success factors to develop a simple diagnostic to support the qualitative analysis. From this we identified the work required in each of the 14 country operations and how these should be prioritised, incorporating this into a regional change management strategy. We presented this strategy at the Regional country head meeting and took part in a series of country-by-country planning meetings. One significant problem was the inability to engage with the staff of the target company, which resulted in a group think perception of what they would be like and how they'd react to being acquired. Challenging this perception was one of our key achievements. Ownership of implementing the change management strategy lay (quite correctly) with each country team. Centrally we supported the country teams by developing materials and delivering training in Merger Integration communication.
The Outcome
The initial merger plan was successfully carried out, particularly the Day 1 to Day 100 communications. Our input to the country-by-country planning turned out to be mainly correct- whilst all the steps had been identified in the right order, it took significantly longer to complete each of the steps. We had prepared them that the training and integration of the sales forces along with their terms and conditions would be a much lengthy process than planned.
A US headquartered pharmaceutical company decided to acquire a company with complementary products and a more promising portfolio of products in R&D. The deal was valued at $41.1bn and Post Merger Integration was carried out by a well known strategy house globally. The acquiring company's strategy had for years rejected non organic growth, so their experience in integrating two companies of broadly similar size was very limited. In the Asia Pacific Region both companies were of broadly similar size, however on a country by country basis, there was a significant disparity and occasionally the acquired company had a larger operation. Global regulatory concerns meant that no communication was possible between the companies before deal day; local integration was contingent upon local regulatory approval, which might take up to a year. There was a concern that the globally approved approach to integration was being communicated late. The project was based in Singapore.
The Approach
We were commissioned to work with the Asia Pacific Regional Team in assisting in the change management aspects of the integration prior to Deal Day. The initial analysis and design lasted 2 weeks based upon access to the deal handbook and a series of interviews with the acquiring company only (we were forbidden to approach the target company). We used our experience of Post Merger Integration success factors to develop a simple diagnostic to support the qualitative analysis. From this we identified the work required in each of the 14 country operations and how these should be prioritised, incorporating this into a regional change management strategy. We presented this strategy at the Regional country head meeting and took part in a series of country-by-country planning meetings. One significant problem was the inability to engage with the staff of the target company, which resulted in a group think perception of what they would be like and how they'd react to being acquired. Challenging this perception was one of our key achievements. Ownership of implementing the change management strategy lay (quite correctly) with each country team. Centrally we supported the country teams by developing materials and delivering training in Merger Integration communication.
The Outcome
The initial merger plan was successfully carried out, particularly the Day 1 to Day 100 communications. Our input to the country-by-country planning turned out to be mainly correct- whilst all the steps had been identified in the right order, it took significantly longer to complete each of the steps. We had prepared them that the training and integration of the sales forces along with their terms and conditions would be a much lengthy process than planned.