M&As: Your time to shine

20 June 2007
More news

21 June 2007 | Antony Barton

Premier Conference coverage

Buyers should welcome corporate mergers and acquisitions as the best opportunity to prove their worth.

Luc Volatier, executive in residence at the Institute for Management Development in Switzerland, said procurement departments on both sides should enjoy the process: "If there's one context in which procurement can really make it or break it, it is in M&As," he added.

To demonstrate this, Volatier showed how steel company Mittal used projected purchasing synergies of $600 million (£300 million) to persuade rival Arcelor to accept a merger.

He said a CPO on the acquiring side should be involved at the beginning of due diligence, use an external party to prepare the integration and secure vital individuals on the target side as soon as the move is announced. He added: "You can't ask a CEO to involve you - you need to convince him you've always been involved."

A CPO on the target side should prepare for the takeover by drafting an action plan, being ready to contribute in a positive way and providing a strong lead for the team. An audience member said bankers' fees should be a CPO's prime focus for savings during the merger.

Volatier added that private equity firms are "procurement-savvy". Although they don't have long-term plans for the companies they buy, he said they recognise procurement's role in making savings and give it more attention than most public limited companies.



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