Acquisitions Acquisitions play an integral part of ASSA ABLOY's growth strategy. In the past 20 years the Group has acquired more than 200 companies. ASSA ABLOY’s growth strategy enables the Group to: Expand into new geographic markets Creating a more efficient manufacturing structure Accelerate innovation Meet customer demand more rapidly Growing with care Acquisitions bring opportunities and risks. When moving into new regions and integrating new units, it is important to understand the new context and to work to ensure that the business is run in line with ASSA ABLOY’s Code of Conduct and values. The ability to grow in a responsible way impacts on ASSA ABLOY’s performance. ASSA ABLOY prefers to acquire sound companies that share the Group’s values and business practices. Risks related to acquisitions ASSA ABLOY has identified the following main areas of potential risk related to acquisitions: Significant environmental pollution (soil, ground water and air) Supplier base in low-cost countries Manufacturing processes that use hazardous substances Poor business ethics Proper permissions The acquisition process Before an acquisition can be completed there are certain steps that must be taken. There are three mandatory due diligence processes, a mapping of the potential company’s major suppliers and sharing of ASSA ABLOY’s business practices, Code of Conduct and values. Two due-diligence processes include sustainability elements: The legal due diligence The operational due diligence In addition to the above due diligence processes a financial and tax due diligence is always performed. The mapping of the targeted company’s supplier base aims to identify risks and potential synergies. Legal due-diligence Elements covered by the legal due-diligence are: Employment contracts Payment processes and wages Insurance and taxes Operational due-diligence In this process ASSA ABLOY decides whether or not to pursue the acquisition. The purpose is also to help the Group understand, plan the work and identify matters that must be managed if the acquisition is completed. Elements included in the operational due-diligence are: Site visits A comprehensive review of all aspects of the operational, commercial and administrative activities Major findings are noted and evaluated from a risk perspective. Integrating acquired companies into the Group ASSA ABLOY has established an efficient process for bringing new companies into the Group and mitigating identified risks. This includes reviewing sustainability-related issues and taking steps to help newly acquired companies raise their standards where necessary. A successful integration of an acquired company is an important part of reducing risks. Post-acquisition measures After an acquisition is completed, employees are introduced to ASSA ABLOY and learn about the Code of Conduct and ASSA ABLOY’s way of doing business through the introduction program ”Entrance to ASSA ABLOY”. Associated suppliers are automatically included in the Group’s supplier database and the company itself is included in the Group wide sustainability reporting .