EXPERT VIEW: Talent acquisition at the heart of M&A

Mergers and acquisitions are common – 111 M&As took place in the UK in the second quarter of 2013 alone – yet there is no ‘one-size fits all’ formula to ensure smooth transitions, writes Chris Molloy, chief executive at RSA, executive search and interim management experts to the life sciences industry.

M&A are time-consuming and stressful, and it is only by placing Talent Acquisition at the heart of M&As that the maximum value can be realised. Studies over the last 20 years showed that up to 83% of M&As fail to produce real benefit for the shareholders (let alone employees) and over half actually destroyed value.  The major causes for failure were cited as people and the cultural differences. Unfortunately, there is no reason to believe that the situation has improved much since. Many have also cited lack of ‘strategic fit’ and ‘inappropriate management during integration’ as the primary reason for poor M&A performance.

The pharmaceutical industry has seen a narrow band of huge companies grow ever larger in the past 30 years as they swallow other firms. In 1985, the 10 largest pharmaceutical businesses accounted for around 20% of worldwide sales, whereas in 2002 the largest 10 accounted for 48% of sales—a striking transformation. Despite these huge figures, the success of M&A is often damaged because a company is more than just its tangible assets. A company is its people, in ‘company’ with one another, defining a culture and a framework for doing successful things.

Benefits of M&As