How Mergers & Acquisitions benefit from the company’s quality transformation

Not surprisingly, Mergers & Acquisitions – with its increasing strategic relevance – has transformed and raised the bar higher than ever.

The aspiration for Philips to become a global leader in health technology comes with two grow options: either we grow organically or we grow through acquiring capabilities, knowledge and expertise. Philips has a long track record in acquisitions with the most recent being Volcano, Path XL and Wellcentive. Each of these acquisitions are strategic moves enriching the value proposition to our customers.

Where we invest

We choose to compete in the area of health technology that enables care for people’s health needs throughout their lives, a concept we call the ‘health continuum’. To this end we clearly define which businesses and markets we want to be in which serves as input to execute our merger and acquisition (“M&A”) strategy. M&A has two main activities:

1. Deal making, which includes building the business case for acquiring other businesses, evaluating the value of that business, negotiating with the parties selling and bringing all stakeholders around the table.
2. Execution or integration once the acquisition has been agreed upon.

Quality at top of mind

Margrit Lelieveld-Solmsdorff, Integration Lead at Philips, emphasizes the important role quality plays within the M&A process. “Operating in a health technology landscape requires us to have a high standard of quality and compliance and rightly so, just think about the lives of patients we touch. In addition, regulatory compliance is our license to play in the markets and sell our products” explains Margrit. We all are aware that if we don’t have quality and regulatory compliance in order, the issues resulting from that like claims or recalls, in its turn result in customer losses and eventually reputation damage which is very hard to come back from. “Therefore it is extremely important to carefully evaluate a potential acquisition with regards to their quality and regulatory maturity”, says Margrit. “We take into account the relationship they have with regulatory bodies, if they ever had litigation issues, if there ever were quality issues, and so on. Over the years we have really raised our standard in this area.”