Pharmaceutical Executive Europe - November/December 2007 - (Page 38) 38 M&A Nov/Dec 2007 Pharmaceutical Executive Europe Streamlining Synergies Wolfram Heinisch and Matthias Dutschmann discuss the importance of post-merger integration and synergy management in the generics industry. hile many regional markets already have comparatively concentrated structures, the global pharma industry is only now embarking on the process of consolidating. Further takeovers are expected, and these will grow significantly in size. Because of the increasing international presence of the generics players and the volume of acquisitions, the strategic focus and complexity of these takeovers will change. While in the past, merging companies predominantly bought market shares and associated sales channels, they now tend to look for acquisition targets with massive overlaps in market activities and complex supply chains. This results in particularly high demands on the integration efforts after the merger. Integrating the new subsidiary is no longer merely a task for accounting, controlling, and the legal department, but for all company functions: R&D, purchasing, production, marketing, sales, IT. Realising synergies across all areas and developing common strategies and organisational structures has become a top priority. A W comprehensive integration approach like this is the only way to exploit the entire value of an acquisition and justify the high premiums related to the acquisition price. The next sections will illustrate three important principles in addressing the challenges of an acquisition process: 1. Establish a clear synergy logic. 2. Ensure a clear allocation of responsibilities. 3. Execute a thorough and consistent integration and synergy management. Naturally, there are many more factors affecting the success of a merger, but these principles focus on issues that are based on our experience. Synergy logic At the beginning of an acquisition, the capital market or the owners are promised better company profits, justifying the high acquisition
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