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Acquisitions and mergers in the pharmaceutical industry: the real work starts after the parties have put their signatures to the deal

No doubt mountains of work were shifted to bring the acquisition to a successful conclusion on paper. But the real work only begins when the parties have put their signatures to the deal. Every communication professional is aware of that. The fact is, he has to pull out all the stops to see to it that the merger becomes a reality in the employees’ minds as well.

1)     A good corporate story is vital

One of the major challenges for merger companies, writes Marcus Hayes in Pharmaceutical Market Europe (PME), is the creation of a good and unambiguous corporate story explaining the merger operation: a story that touches and inspires the employees of both companies in terms of both logical reasoning and emotional attachment. It is vital for this explanation of events to neutralise the differences between the merging companies and to create synergy, resulting in the new company becoming more than the sum of its parts.

That’s no picnic for the Pfizer-Allergan conglomerate when you consider, without going any further, that Pfizer has for years been renowned for its excellent in-house R&D team, whilst Allergan’s CEO is a notorious sceptic when it comes to in-house drug discovery.

A clear strategy and a rock-solid corporate story of which each and every individual employee can avail himself are a condition for bridging the cultural differences.

2)     Take employees seriously

The corporate story I refer to above must of course not only be supported by the MT, but by the whole company. A company’s emotional and cultural identity is one of the most important conditions for loyalty, commitment and productivity. The acquired party irrevocably has to deal with a completely new culture, and – worse still – the rules and identity of a party that had previously often been viewed as a rival. It is therefore advisable to ensure that everyone in the new company, without exception, is imbued with the new identity. Every one of the pharmaceutical companies that have been most successful in doing this have based themselves on the thought that change begins in the minds of individuals. If from the outset employees are well informed and personally engaged, and are even given a say in the way they want to carry through the changes in their part of the chain, a merger turns into a personal and collective challenge rather than a threat.

3)     Make sure you win over the leaders

It might sound like stating the obvious, but in the case of acquisitions with the scope and impact of the Pfizer/Allergan merger, centralised control is not enough. In unsettled times people need leadership, at every level; so they approach their superiors first to ask for information and interpretation. The companies that have been most successful in carrying through their merger have started by informing and involving the “leaders” within the company, and have subsequently provided these leaders with the tools to pass on the information on the merger and the new company’s vision further down the hierarchy, via the managers to the shop floor. The earlier this happens in the process, the better.

4)     Focus on “quick wins”

As soon as there is talk of a merger, be it off the record or officially, the gossip factory gets under way. It is not uncommon for an internal horror story about the merger to start doing the rounds, and this is often much more negative than the actual situation. To avoid a horror story and to give shape to your own stage-managed in-house account of what is going on, it is a good idea to celebrate “short-term successes” and have these form part of that in-house account. Give the leaders the communication tools and the opportunity to celebrate and share these team successes and to write the episodes of the account themselves.


Postscript

I wrote the original blog on this subject when the merger was in the bag. Or so it was thought...
It has since been revealed that the deal is being cancelled on account of the new anti-tax avoidance rules announced by President Obama, as Pfizer reports on its website.
So I am adding an extra tip.

5)     Keep communicating, even when it’s about bad news

However bothersome it may be, you have to carry on. Your corporate communication does not come to a standstill because a process has come to an end or been discontinued. Continue to keep your stakeholders informed of your vicissitudes, both the positive experiences and the trials and tribulations. A company is just like a living being, with ups and downs and with an image and a reputation. And with an opinion and a voice. Use those!

Serge Beckers

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