Acquisitions Acquisitions play an integral part of ASSA ABLOY's growth strategy. In the past 10 years the Group has acquired more than 170 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 Health and safety The acquisition process The Group-wide acquisition process is divided into four phases: Strategy Assessment Implementation Integration There are three main due dilligence processes that help ASSA ABLOY decide whether to pursue the acquisition, and what actions need to be taken if the acquisition is completed: Financial and tax Legal - including employement contracts, payment processes, wages and insurance Operational - including the use of chemicals and compliance An excessive number of red flags in the Legal and Operational due dilligence processes related to sustainability may mean that the acquisition process is abandoned indefinitely. The supplier base of the potential company is also investigated and aims to identify risks and potential synergies. 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 .