How to Manage Process Safety during Mergers and Acquisitions

The global food industry operates within a complex supply chain, involving various stakeholders from farmers to manufacturers and distributors. Amid intense competition, companies strive to optimize earnings, often resorting to mergers and acquisitions for consolidation. An overview of acquisition and integration processes has showed that failure to anticipate the process safety risks has led to production stoppages, product downgrades, dramatically higher infrastructure and other costs, and severe reputational damage due to the occurrence of large incidents. This paper delves into Cargill's 2023 acquisition of three industrial complexes and four storage country elevators in Brazil, detailing the structured process, lessons learned, and outcomes.

The acquisition process is dissected into two pivotal steps: Due Diligence and Integration. The Due Diligence phase emphasizes a comprehensive examination of the target company's process safety capabilities, detailing the workflow, steps, resource tools, and decision-making processes. The Integration phase focuses on assimilating the target company's process safety activities into the acquiring company's management systems. This section discusses the specific steps taken, addressing elements like Hazard Identification, Risk Assessment, Management of Change, and Asset Integrity.

By methodically structuring the acquisition process, Cargill effectively identified major risks during the Due Diligence phase, providing a solid foundation for informed decision-making. The outcomes of this phase translated into the development of an investment list for subsequent design changes, systematically implemented post-acquisition. The Integration phase played a pivotal role in ensuring the seamless assimilation of process safety programs. This involved the strategic allocation of appropriate resources, time, and personnel to control and mitigate identified risks.

In essence, Cargill's success in navigating this complex acquisition underscores the importance of a well-structured process. It not only anticipates potential risks but also facilitates a smooth integration, presenting valuable lessons for companies operating in similarly competitive and dynamic industries.