Mergers and acquisitions (M&A) present businesses with opportunities for growth, market expansion, and operational efficiency. However, achieving a successful integration requires careful planning and strategic decision-making, particularly in procurement. A well-executed procurement strategy can unlock cost savings, operational synergies, and supply chain efficiencies, maximising the overall value of the transaction.
The role of procurement in M&A
Procurement plays a critical role in M&A, ensuring that supplier contracts, supply chain risks, and operational efficiencies are effectively assessed and aligned. Without procurement expertise, businesses risk inefficiencies, contract duplication, and supplier disruptions that can erode the expected benefits of a merger or acquisition.
Key areas where procurement adds value in M&A:
1. Due diligence and risk assessment
Before finalising an M&A deal, procurement teams conduct detailed supplier audits, contract reviews, and cost analyses to identify potential risks and opportunities. Key considerations include:
- Supplier dependencies and concentration risks
- Contract liabilities and obligations
- Procurement cost structures and potential savings
This proactive approach ensures businesses fully understand their procurement landscape before making critical decisions.
2. Cost synergies and supplier consolidation
One of the biggest advantages of M&A is the ability to consolidate suppliers, negotiate better terms, and eliminate redundant costs. Procurement professionals assess opportunities for supplier rationalisation, bulk purchasing, and streamlined logistics, driving measurable cost reductions.
By leveraging economies of scale, businesses can achieve:
- Lower procurement costs through bulk negotiations
- Improved supplier relationships and strategic partnerships
- Greater operational efficiency through a unified supply chain
3. Supply chain integration and optimisation
Merging two organisations often means integrating different procurement processes, technologies, and supply chains. Procurement specialists help harmonise supplier contracts, align procurement policies, and implement consistent supply chain management practices.
This ensures:
- Minimal disruption to operations
- Efficient inventory and logistics management
- A unified approach to procurement governance
4. Technology and digital procurement alignment
Merging businesses often operate different procurement systems and digital platforms. Procurement expertise is crucial in evaluating procurement technology, identifying system redundancies, and implementing a integrated digital procurement solution.
A well-integrated procurement technology stack improves:
- Spend visibility and cost control
- Supplier performance tracking
- Procurement process automation
5. ESG and sustainable procurement considerations
In today’s business environment, sustainability and Environmental, Social, and Governance (ESG) factors play a key role in procurement decision making. M&A provides an opportunity to assess and improve sustainable sourcing practices across the newly formed organisation.
Procurement professionals help:
- Ensure supplier compliance with ESG standards
- Identify ethical sourcing opportunities
- Streamline sustainability reporting and governance
Maximising M&A success with procurement expertise
https://accelerateprocurement.com/what-we-do/supplier-management/Procurement is not just a back-office function in M&A: it is a strategic enabler of value creation. By leveraging procurement expertise, businesses can optimise costs, enhance supply chain efficiency, mitigate risks, and ensure a seamless integration.
If your business is navigating an M&A transaction, our procurement consultancy can provide expert guidance to maximise deal value and ensure long-term success. Get in touch with Accelerate today to learn more.