From a local sparkling wine house to global market leadership - Transforming business by Mergers & Innovations

We held a mini-interview with Dr. Andreas Brokemper, CEO, Henkell Freixenet, who will give a lecture on the topic "From a local sparkling wine house to global market leadership - Transforming business by Mergers & Innovations" at : CONTROLLING DAYS 2024, Strategija i transformacija, 23.-24.05.2024.

How to combine innovation and mergers to achieve strategic business transformation, ensuring alignment with the company's vision?

Mergers and innovations are two powerful ways to completely transform businesses and gain a competitive advantage, tap into new segments and expand market share. An important difference is of course that mergers and acquisitions involve external parties, while innovation can be generated in the existing organizations. However both require strategic planning, careful execution and effective management to be successful. During a merger it's important to develop an understanding of the innovation capabilities of both companies and how they may complement each other. To ensure the alignment with the company's vision and strategy it's finally the top leadership to decide which innovations to pursue and which mergers to target.

What are the key innovations that companies can implement during the merger process to improve efficiency and create additional value for stakeholders?

To improve efficiency during the merger process, communication and collaboration across different teams and functions is key. Today we have so many great digital tools that facilitate these aspects and ensure a smoother process, starting with a virtual data room during due diligence for example. In terms of innovations, it's also about the mindset. We want to encourage creativity and continous learning throughout the organization and also take this mindset into the merger process.
 

How to choose the right partner for a merger or cooperation that supports innovation and contributes to the long-term success of business transformation?

When you start exploring if a company could be a good fit for a merger it's a lot about relationships. Of course you want to find a partner that brings the right capabilities, resources or reputation that you are looking for, but equally important to the strategic fit is a trusted relationship. This is the foundation for negotiations and also for future collaboration and innovation potential. The right partner should be willing to learn from each other and be open to create and stand behind a new common vision.

What are the most important strategic benefits that companies can achieve through mergers and innovations, and how to avoid the common challenges that accompany such processes?

I would say the two most important strategic benefits that companies can achieve through mergers are:

Synergies: By combining resources, capabilities, and expertise, companies can create greater value than they could separately. 1 + 1 = 3, not 2. This includes cost savings, know-how, better bargaining power or operational efficiencies.

And on the other hand diversification: By entering new markets, market segments or diversifiying in portfolio, companies can reduce their dependence on prevailend markets or customers, thereby reducing market risks while exploring new opportunities for growth.

Innovation itself has so many strategic benefits. With new innovative products or services you can meet the changing needs of customers or relevant stakeholders. To put it simple - a company that cannot innovate risks losing its competitive edge and may struggle to keep growing in revenue and profit. Of course there are a couple of common risks and challenges that need to be managed carefully. Probably the biggest one is bringing together the organizations and teams. I don't think it works without changes on both sides. But in the end the goal should be to foster some sense of belonging, to have one team united by focusing on the company's vision that works towards shared goals together.
 

How to manage cultural aspects of business during mergers and innovations, in order to ensure harmony among employees and preserve organizational efficiency?

The cultural aspect can be challenging for both organizations involved, especially when they have very different cultural backgrounds and values. But the clash of cultures can also be very beneficial, if you are able to use the momentum for a new company culture. We did that in case of the merger of Henkell and Freixenet. What we did was to conduct a cultural assessment of both organizations to identify similarities and differences in the values, norms, attitudes and vision. We wanted to create a „best of both worlds“ approach, combining the best elements of formerly Henkell and formerly Freixenet to create a new common culture, while also leaving room for the distinctivness of each country. We boiled it down to four core values of Henkell Freixenet which we communicated globally and had workshops on with our group companies.

If you want to learn more about the topic "From a local sparkling wine house to global market leadership - Transforming business by Mergers & Innovations", join us at: CONTROLLING DAYS 2024, Strategija i transformacija, 23.-24.05.2024.