Innovation Matters
digital quality MH

Jun 23, 2017

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

Estimated reading time: 4-6 minutes

Transforming a company and putting quality as n. 1 priority means touching every single employee and every single function.

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.

Health continuum

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.”

The drive to improve

Venky Gopalaswamy

We have also improved the quality of our own way of working. We are starting already during  due diligence to build an integration plan, so that we are ready to fast-start after closure. A quick and targeted integration needs to define the pathway to our integrated backbone and ensures value creation and proper change management. The Quality & Regulatory organization plays a key role doing a successful integration and realizing the growth plans of our acquisitions.

A huge achievement under Venky Gopalaswamy’s leadership (VP Q&R and responsible for Philips Quality Management System) is the integrated way of working between Q&R, M&A and the other functions. “Together with the functions we clearly defined our way of working in terms of negotiation and integration of acquisitions in an M&A playbook which we use as a guiding document to set up a good integration plan and to ensure successful execution. Now people know how we work and what they can expect. We have standardized our processes and it helps to align all parties involved” explains Margrit. The M&A playbook maps out the process and the interdependencies between the different Functions, with clear indication who to align with at what time. “With each project we are getting better and better, integrating faster and with less disruption of the daily business.” 

Quality can be found everywhere

"I’m proud to see we raised the   quality bar of our mergers and acquisitions and with that contributing to the execution of our strategy.” It is a perfect example of how quality can be found everywhere and in everything we do, whether you work in a Function, Business or Market. Quality is a mindset and a value we embrace every day.

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Innovation Matters delivers news, opinions and features about healthcare, and is focused on the professionals who work within the industry, as well as Philips as a cutting-edge health technology organization.

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