How can ASSA ABLOY develop its M&A analysis with regard to supply chain synergies?

Abstract (Swedish)

Abstract
Title: How can ASSA ABLOY develop its M&A analysis with regard to supply chain synergies?
Authors: Axel Johnsson and Erik Hellberg
Supervisor: Andreas Norrman
Examiner: Louise Bildsten

Background:
Mergers and acquisitions (M&A) are majorly conducted with the ambition and endeavour of realizing synergies, thereby enabling the merged corporation to generate greater value compared to operating independently. Synergies, on a high level divided tino cost efficiencies and revenue enhancements, are frequently cited as key drivers for conducting M&A activities. However, while synergy is commonly used to justify M&A, research shows that the stated synergies are rarely fully realized due to inaccurate or overly optimistic synergy assessments. Overestimating synergies can therefore imply magnified and overestimated company valuations and in the end decrease the precondition for executing successful M&A deals. This illustrates the great industry challenge in the pre-M&A phase to accurately and as precisely as possible, value synergies since the synergy analysis plays a directly crucial role. In order to improve the effectiveness and accuracy of pre-M&A synergy analysis and by extension M&A transactions overall, a structured and reliable synergy analysis model is pivotal for accurately identifying and valuing potential synergies.

Problem definition and scope:
ASSA ABLOY, a global leader in entrance solutions, has executed over 300 acquisitions since its founding in 1994, primarily through horizontal acquisitions to support and enable geographical expansion and market consolidation. To grow and increase competitiveness through acquisition have been an integral part of ASSA ABLOY’s strategy and will continue to be so in the future. Supply chain synergies have although not been a central consideration in the company’s acquisition strategy, possibly due to the absence of a structured and comprehensive valuation framework. Instead, synergy assessments rely heavily on empirical knowledge and prior M&A and industry experience of M&A managers executing the M&A deals. The purpose of this thesis is to analyze past M&A transactions and develop a framework for systematic valuation of supply chain synergies, with the ambition to increase the preconditions for successful M&A deals in the future.

Theoretical framework and methodology:
The theoretical foundation of this thesis explores the motives, structure, and success factors of M&A, with a particular focus on the pre-M&A analysis regarding supply chain synergies. Supply chain synergies are categorized into supply chain management, logistics, and procurement. The study utilized a multiple-case study design, with four different acquisitions made recently by ASSA ABLOY examined. Interviews served as the main data collection method, with qualitative within-case and cross-case analysis conducted subsequently.

Result and Conclusion:
The findings illustrated a series of structural and procedural challenges in the supply chain synergy analysis process at ASSA ABLOY. The analysis showed that informal practices and data limitation were recurring in all cases, indicating systemic barriers to effective pre-M&A supply chain synergy analysis. Meanwhile, involvement of SCM managers and the neglect of aggregated synergy value over time were found to vary in importance depending on deal characteristics and strategic fit. In addition, the research established that structural equivalence, defined as the degree of supply chain similarity between the acquiring and target company’s supplier and customer networks, plays a critical role in determining the preconditions in obtaining synergies. High upstream structural equivalence was found to increase the likelihood of realizing procurement synergies whereas high downstream structural equivalence was found to increase the likelihood of achieving logistics synergies.

To address these deficiencies, a structured synergy framework was developed to guide M&A teams and business unit leaders through a more systematic supply chain synergy analysis process. Centered around synergy type, size, timing, as well as probability and incorporates both pre-deal analysis and long-term synergy aggregation logic. From this, a set of actionable implementation recommendations was derived, focusing on formal integration into the M&A process and the long-term synergy analysis.

Contribution:
The thesis has been a complete collaboration between the two authors. Each author has been involved in every part of the process.

Popular Abstract

Supply chain synergy analysis – A framework for operational M&A BY AXEL JOHNSSON & ERIK HELLBERG (May 2025)


Potential synergistic effects are crucial to the decision of whether M&A transactions should be completed or not, and could be the difference between a failed and successful deal. This is why the study has produced a framework for comprehensive and accurate supply chain synergy assessment.

When executing M&A within industry, gut feeling and prior experience is the most frequently used tool to evaluate synergies, specifically supply chain synergies. But how accurate is that? For ASSA ABLOY, a global leader in entrance solutions, these estimates often involves informal judgments, especially when evaluating supply chain synergies. We wanted to challenge that.

Our work centered on designing a structured framework that helps companies evaluate supply chain synergies before signing a deal. The goal? To avoid overestimations and improve decision making during the M&A process. Specifically, we focused on logistics, procurement, and supply chain management, which areas that often hold the most promise but are hardest to correctly evaluate and realise.

So, what was the problem? Despite decades of acquisitions and a stipulated strategy to grow through acquisition, ASSA ABLOY lacked a consistent method for analyzing supply chain synergies during the early M&A phase. This led to uneven evaluations and potentially lost value. The issue isn’t unique to them since many companies face the same blind spot.

What surprised us most was how, possibly, a structured framework could improve the M&A process, specifically even with limited access to the target company’s data. Many synergies, previously assumed to be “obvious,” turned out to be weak or unrealizable upon closer analysis. The opposite was also true, some less-noticed areas revealed major potential. Explicitly logistics synergies as well as the aggregated synergy perspective after multiple acquisitions. In order to arrive at this framework, we combined expert interviews, internal documents, and historical M&A cases from ASSA ABLOY’s which allowed us to build, test, and refine a tool that balances both strategic insight and practical usability.

The result isn’t just another academic contribution, it’s aiming to present an operational approach that can enable M&A teams within industry to quickly spot where real value lies, and where caution is needed from the supply chain perspective. In a field where assumptions often go unchecked, our framework provides structure, consistency, and clarity in the otherwise limited and challenging M&A business segment.

This popular scientific article is derived from the master thesis: How can ASSA ABLOY develop its M&A analysis with regard to supply chain synergies?, written by Axel Johnsson and Erik Hellberg (2025).

• author: Hellberg, Erik and Johnsson, Axel
• supervisor: Andreas Norrman
• organization: Production Management; Engineering Logistics
• course: MTTM02 20251
• year: 2025
• type: H2 - Master's Degree (Two Years)
• subject: Business and Economics
• keywords: M&A, Synergy, M&A Framework, M&A Supply Chain, Procurement, Logistics, Supply Chain Management
• other publication id: 6035
• language: English
• id: 9196525
• date added to LUP: 2025-06-17 17:05:39
• date last changed: 2025-06-17 17:05:39