9-1 Merger Integration Report

P a g e | 2 Contents Introduction ................................................................................................................................................. 2 Guiding Coalition Recommendations .......................................................................................................... 2 Stan Raffety ............................................................................................................................................. 3 Omar Mattsson ........................................................................................................................................ 3 John Martensson ...................................................................................................................................... 4 Elaine Hartwick ................................................................................................................................... 4 Team Building Strategies ........................................................................................................................ 5 Employee Attrition Analysis Report ............................................................................................................ 6 Current Employee Demographics ............................................................................................................ 7 Attrition Analysis .................................................................................................................................... 8 Retention ............................................................................................................................................... 10 Actionable Steps .................................................................................................................................... 12 Alternative Buyer Research Report ........................................................................................................... 13 Current Market ...................................................................................................................................... 14 Financial Situation ................................................................................................................................. 15 Recent Developments ............................................................................................................................ 16 Buyer Rationale ..................................................................................................................................... 16 Acquisition Road Map ............................................................................................................................... 18 Acquisition Related Tasks ..................................................................................................................... 18 Exit Strategy Recommendations and Plan ................................................................................................. 20 Change Management Strategy ............................................................................................................... 20 Summary ............................................................................................................................................... 22 Risks ...................................................................................................................................................... 23 Appendix ................................................................................................................................................... 25 Avg Tenure at Company by Gender/Marital Status ............................................................................... 25 Avg Tenure at Company by Gender and Job Role ................................................................................. 26 Attrition analysis on gender/age ............................................................................................................ 26 Attrition analysis gender/age vs training frequency .............................................................................. 27 Job Satisfaction by gender and income .................................................................................................. 27 Gantt Chart ........................................................................................................................................... 28 References ................................................................................................................................................. 29

P a g e | 5 individuals and achieve desired outcomes. Despite occasional abrasiveness, Omar excels at communicating the organization's vision and motivating his team to meet goals and directives. With his strong leadership skills, ambition, influential behavior, and credibility, Omar is an ideal candidate for the guiding coalition group. His colleagues trust him to successfully navigate the new change initiative. John Martensson John, the Research Director at Life Sciences, has an impressive 22-year tenure with the company. He plays a crucial role in conducting scientific research for the organization's phenomenally successful flagship oncology drug. In addition to overseeing research labs in three countries with a team of over one hundred scientists, John's experience makes him an ideal candidate for the guiding coalition. Being part of the organization since its inception, he possesses valuable knowledge about its history, previous change initiatives, and goals. John's insights on what worked and what did not in the past, along with his involvement in unsuccessful mergers, make him an asset in ensuring the success of the current merger. Moreover, his respected reputation for being efficient and effective will aid in communicating the change and gaining employee buy-in and respect. Elaine Hartwick Elaine, the Acting Director for Life Sciences, has a decade-long tenure with the company. Currently overseeing eighteen senior managers and direct reports, Elaine is recognized for her adaptability and strong leadership skills. She excels at identifying and leveraging the strengths of others, enabling them to reach their full potential. Elaine's visionary mindset enables her to anticipate future growth and potential for the organization. This perspective allows her to strike a

P a g e | 8 engagement, organizational performance, and talent acquisition. By doing so, organizations can proactively address any issues, foster a positive work environment, and increase their ability to retain and attract talented individuals. Current Employee Demographics

P a g e | 11 Figure 2 Attrition Analysis Attrition can occur “when employees leave the workforce much quicker than the rate at which they can be replaced. Vacancies stay open for more extended periods. Or sometimes, they are eliminated because skills are currently unavailable in the job market. It is also a long-term issue. A high attrition rate can have positive and negative impacts, depending on the circumstances” (Siocon, 2023). Attrition can occur in two ways: voluntarily or involuntarily. Voluntary attrition happens when an employee chooses to leave the organization, while involuntary attrition occurs when an employee is let go due to company restructuring or economic conditions. The main reasons for employee attrition include unsatisfactory working conditions, limited career advancement opportunities, ineffective management and leadership, lack of recognition and rewards, and a decrease in pay and benefits. When analyzing attrition data, it is important to consider changes in education, gender, and age to accurately assess the trends. The

P a g e | 14 Retention Retention can best be defined as an “organizational goal of keeping productive and talented workers and reducing turnover by fostering a positive work atmosphere to promote engagement, showing appreciation to employees, providing competitive pay and benefits, and encouraging a healthy work-life balance” (Baker & Sutner, 2022). High employee turnover can result in decreased productivity and a loss of competitive advantage for the organization. This is because the organization loses valuable institutional knowledge and incurs additional costs for training and hiring new employees. Moreover, turnover negatively affects the brand and impacts the overall customer experience. The data suggests that there is a higher likelihood of attrition due to limited training and career advancement opportunities. Male employees tend to receive more training and have more chances for advancement compared to their female counterparts. Although female employees have longer tenures on average (around 7 years), they receive training only once a year, with many not having any promotion opportunities in the past 3 years. Additionally, male employees have experienced a salary increase of over 13%, while female employees have only seen an 8% increase. According to a report from the Government Accountability Office, women “constituted 59 percent of the low wage workforce. Only 24 percent of CEOs in the U.S were women and they earned 74.5 percent as much as male CEO’s” (Gender Inequality and Women in the US Labor Force, 2011). Over the past decade, there have been notable progressions concerning women in the workforce. Nevertheless, it remains undeniable that despite these advancements, women continue to be underrepresented in top-level positions and earn significantly less than their male counterparts. By enhancing opportunities, ensuring equal pay and benefits, organizations can

P a g e | 17 The life sciences division of our organization has consistently achieved year-over-year revenue growth as well as gained a significant market share through the diversification of its portfolio, as well as offering a wide range of pharmaceutical products in different areas. The board of directors has identified potential buyers who can carry forward the organization's legacy and mission statement. In this assignment, we will conduct a thorough analysis of an alternative buyer and provide a roadmap outlining the necessary steps for a successful acquisition. Current Market Gilead Sciences is a biopharmaceutical company with a headquarters in California with a focus on discovery, research & development, and marketing of innovative medicines in the areas of virology, oncology, and inflammation. Gilead’s mission statement is “to discover, develop and deliver innovative therapeutics for people with life-threatening diseases” (About Us| Gilead, n.d.) Gilead Sciences has a diverse customer base that is comprised of pharmacies, hospitals/clinics, and various other healthcare providers operating within the pharmaceutical industry. Gilead Sciences is a pharmaceutical company specializing in developing medications and treatment options for various medical fields which include oncology, virology, and inflammation. Gilead has been at the forefront of HIV management and prevention, offering innovative once-a-day oral medication for pre-exposure prophylaxis (PrEP). Gilead has made significant contributions in the treatment of Hepatitis and liver disease, and they have developed the first antiviral medicine for COVID-19. The organization is actively researching and developing new treatment options for individuals with fibrotic and inflammatory diseases in the fields of hepatology, pulmonology, gastroenterology, and rheumatology. Gilead currently offers

P a g e | 20 Based on an intense review and analysis of the data, it can be determined that Gilead Sciences is the suitable option as an alternative buyer for our organization. The future trajectory of our organization involves expanding operations and development in the fields of oncology. The 2023 growth trajectory supports increases in virology, which is driven by increases in an aging population, rising chronic diseases, and improved access to healthcare. These markets offer limitless growth opportunities. To remain competitive and ensure employee stability, we must partner with a company committed to innovation within these sectors. The fields of oncology, virology, and pharmaceuticals all have growth opportunities due to advancements in digital technology. Gilead's commitment to the development of groundbreaking medications, continuously improving their product pipeline, forming collaborations and partnerships, and their prominent position in the biopharma industry, demonstrate that they share in our organization's vision and mission statement. Additionally, Gilead's consistent growth in sales and revenue year after year indicates that they possess the resources required to sustain further expansion within their customer base. This enables them to invest in crucial clinical trials, strengthening their market position. Investors will continue to see positive earnings as over the last several years Gilead “has made 11 strategic acquisitions and entered partnerships focused on innovating its oncology solutions. Consequently, this has both bolstered its commercial offerings and enriched its clinical pipeline. The company’s ambitious vision is to bring more than ten transformative medicines in this area to patients by the end of this decade. Taking into account GILD’s robust product pipeline, the company should see steady growth in its organic revenue in the forthcoming years” (StockNews.com Staff, 2023).

P a g e | 21 Acquisition Road Map Acquisition Related Tasks To prepare for an impending acquisition the organization conducted a financial review and found increased earnings from the sales of its reputable oncology drug in preparation for an upcoming acquisition. The decision was made that the future strategic direction of the organization would be to focus more on oncology and virology. It was determined that due to the future desired state of the organization that the potential buyer would have to enhance the organizations position within those areas of focus. The estimated completion time for the acquisition is 2 years. Since joining the strategic planning team, a guiding coalition was formed, involving leaders from various departments to assist with communication, transition, and motivation during the acquisition process. Core strengths and current processes were analyzed to identify areas for increased efficiency and productivity. Attrition levels were also examined through surveys and employee engagement reports, leading to the identification of opportunities to improve engagement and retain talent. The organization's future state was assessed by examining historical data and current financials to ascertain the value of its selling power and market position. This evaluation aimed to identify and evaluate any obstacles that could potentially hinder the acquisition. Subsequently, further research and evaluation were conducted to identify potential alternative buyers in the industry sharing the same strategic vision and mission as that of our organization and possess the necessary resources and innovation capabilities to improve the organization's current state as well as boost its marketing potential.

P a g e | 22 Please see the below Gantt Chart with the completed steps as well as future steps to be taken. Figure 6 After completion of the initial steps, there are additional tasks that need to be conducted to guarantee a successful acquisition. Once we have identified an alternative buyer, Gilead Sciences, the preceding step will be to inform them of our intention to sell the organization and outline our terms and conditions for the desired future state of the organization. This process is expected to take approximately 90 days as it involves drafting a legal agreement, reviewing the terms, valuing our organization, and receiving a response from Gilead regarding the intent to sell. Our strategic team will conduct a comprehensive financial analysis and valuation of Gilead based on the intent to sell agreement. The analysis will include factors such as payment timelines, dependence on new clinical trials, marketing and distribution of existing and new medications. The estimated completion time for this task is 90 days. Upon completion, a meeting will be held with all interested buyers, including potential buyers outside of Gilead. The strategic

P a g e | 23 team will review their proposals then conduct valuations to determine the best fit for the organization. The estimated time for these meetings and negotiations is estimated to be 6 months. Upon selection of a potential buyer, legal will draft a sale agreement for final review by the strategic team, to include a valuation of the buyer's financials. This process may take from 3-6 months due to contractual negotiation. Once the strategic team has approved the terms, the document will be sent for final approval to the board of directors as well as the buyer. This step is estimated to take 2 months. Upon finalization of the deal and setting an acquisition date, the sale of the organization will take place, and the guiding coalition will prepare the staff for the upcoming changes during the transition, which may take up to 6 months for completion. Exit Strategy Recommendations and Plan Change Management Strategy In managing the change process of the Life Sciences organization acquisition, we will utilize Kotter's change model as a guide. The guiding coalition will reinforce the impending acquisition and the resulting changes to create a sense of urgency throughout the organization. They will teach members how to identify potential problems in policies, procedures, and technology, enabling them to anticipate change. This culture of urgency will empower employees, giving them control and accountability, and allowing them to make decisions autonomously, fostering trust. The guiding coalition will educate all members of the organization, emphasizing the significance of having a sense of urgency. “People need to know that you’re not just asking them to run faster for the sake of running faster, but what the outcomes are that urgency is designed to achieve” (Overby, n.d.) The Gantt chart illustrated in Figure 6, shows the impending tasks and

P a g e | 24 estimated periods in which the tasks should be completed. The coalition's role is to ensure effective and open communication about all aspects of the change to organization members promptly. Additionally, they will facilitate the swift implementation of the changes and play a crucial role in shaping the newly established vision. The coalition will ensure effective communication to all employees of the Life Sciences organization, keeping them informed about the change process. Additionally, they will provide more detailed information and communication to the leadership, focusing on the critical components of the acquisition. The enclosed Gantt Chart outlines the necessary tasks for a successful acquisition. The guiding coalition members will be responsible for researching and analyzing the organization's internal processes, implementing the acquisition strategy, and evaluating the future state of the organization. The organization's strategic vision is focused on achieving long-term goals through research and development, driving innovation in biotech, and ensuring access to quality healthcare and consumer products that align with the brand's image. The vision for employees is to foster unity, encourage acceptance of the vision, empower them to take action and embrace change, while understanding the benefits it brings to both the employee and the organization. Employees may face barriers to change if they do not understand the purpose of the change and how it can benefit the organization. They may also feel intimidated by the acquisition and worry about potential job loss. Overcoming these barriers requires consistent and open communication, allowing employees to express their concerns and ideas. In addition to communication, providing training and support to employees during the change process is crucial. This can help alleviate any fears or uncertainties they may have and equip them with the necessary skills and knowledge to adapt to the recent changes. By investing in employee

P a g e | 25 development, organizations can ensure a smoother transition and increase employee engagement and satisfaction. Another barrier to change that employees may face is resistance due to a lack of trust in the leadership or the change itself. Building trust is essential in overcoming this barrier. Leaders should be transparent and honest about the reasons for the change, addressing any concerns or doubts that employees may have. By demonstrating integrity and credibility, leaders can help alleviate resistance and gain the support and cooperation of employees. It is also important to involve employees in the change process and give them a sense of ownership. This can be done through participation in decision-making, soliciting their input and ideas, and involving them in the planning and implementation of the change. By empowering employees and making them feel valued and included, organizations can foster a sense of commitment and motivation towards the change. Recognizing and celebrating small wins and milestones throughout the change process can also help overcome barriers. This can boost morale and motivation among employees, showing them that their efforts and contributions are making a difference. By acknowledging and rewarding progress, organizations can create a positive and supportive environment that encourages employees to embrace the change. To ensure successful change management, key performance indicators (KPIs) will be established to track progress and gauge success. The guiding coalition will use these metrics to assess the effectiveness of the change process and make necessary adjustments. Any achievements during the acquisition will be shared with employees through internal communication channels, highlighting the benefits of the change. Summary

P a g e | 26 Kotter's change management strategy is the most suitable approach for the acquisition of the Life Sciences organization. This strategy enables the organization to effectively identify a strategic vision that aligns with its goals. By utilizing the resources, experience, skills, and industry knowledge of the guiding coalition members, the organization can gather all the necessary components for a successful acquisition. This strategy also helps in implementing and enforcing the necessary changes while overcoming any opposition or resistance. Through this unique approach, the Life Sciences Organization can position itself as a stronger competitor in the oncology and biotech industry by expanding its resources and influence. The acquisition will also enhance the organization's capacity for research and development of new therapeutics and innovative vaccines across various fields, aiming to eradicate and treat diseases and disorders. Risks In conclusion, we will address three potential risks to the recommendations provided in the change management strategy and propose steps for the organization to mitigate these risks. The first risk involves the possibility of bringing in employees who lack the necessary skills, resources, and value to contribute effectively to the new organization. This could result in a dearth of valuable information and slow progress. To counter this risk, the Life Sciences Organization will ensure that all employees involved in the acquisition receive relevant training, possess the required skills, and are well-versed in the organization's processes and procedures. The second risk pertains to market volatility caused by economic issues. Given the constant fluctuations in the economy, the market can become unstable and unpredictable. While it is impossible to control market volatility, the organization can ensure that all those affected by the acquisition are equipped with the necessary skills and training to identify disruptions in the

P a g e | 27 market. They should also be capable of devising contingency plans to address instability and possess the ability to analyze historical data and identify potential disruptions before they occur. The final risk involves a lack of due diligence and proper preparation. This risk can be mitigated by initiating the due diligence process early on and ensuring that all parties involved understand the potential consequences of inadequate due diligence, such as damage to the organization's brand and reputation. Additionally, they should be capable of reviewing and analyzing financial statements and other sources of data, identifying regulatory violations, determining the strategic fit, and identifying strengths, weaknesses, and opportunities. Effective communication and negotiation skills are also crucial to ensure necessary adjustments are made.

P a g e | 28 Appendix Avg Tenure at Company by Gender/Marital Status

P a g e | 29 Avg Tenure at Company by Gender and Job Role Attrition analysis on gender/age

P a g e | 30 Attrition analysis gender/age vs training frequency Job Satisfaction by gender and income

P a g e | 31 Gantt Chart Life Sciences acquisition task list Select a period to highlight at right. A legend describing the charting follows. Period Highlight: 9 Plan Duration Actual Start % Complete Actual (beyond plan) % Complete (beyond plan) ACTIVITY PLAN START PLAN DURATION ACTUAL START ACTUAL DURATION PERCENT COMPLETE PERIODS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 Formation of Guiding Coalition 1 1 3 1 100% Analysis of core strenghts and processess 2 2 4 2 100% Industry research and data-employee attrition 2 2 4 3 100% Acquisition strategy-R&D of market position, financials and future projections 3 3 5 3 100% Valuation of organization- future state 4 3 9 2 75% Potential Buyer Research 9 4 6 2 100% Letter of intent to sell 15 3 x x x% Financial analysis/valuation of potential buyer 18 3 x x x% Meetings of intent with interested buyers 24 6 x x x% Negotiation of offers 33 6 x x x% Draft and review of agreement to sale 42 6 x x x% Final approval 47 2 x x x% Sale of organization 51 6 x x x% x x x x x%

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P a g e | 33 Kumar, P. (2023, October 27). Uncovering the top reasons behind employee attrition: effects and strategies to combat them. Free Forever HRMS and Payroll for Unlimited Employees. https://kredily.com/reasons-behind-employee-attrition/ Overby, S. (n.d.). How to create a sense of urgency without stressing out your team: 7 tips . The Enterprisers Project. https://enterprisersproject.com/article/2019/6/how-create-sense- urgency-in-teams-7-tips People Management. (2023, November 23). How can you align your team with a change initiative? www.linkedin.com. https://www.linkedin.com/advice/3/how-can-you-align- your-team-change-initiative-yvjaf Siocon, G. (2023, October 16). What is Attrition Rate? How To Calculate and Analyze It . AIHR. https://www.aihr.com/blog/attrition-rate/ StockNews.com Staff. (2023, November 6). Gilead Sciences (GILD) Earnings forecast and Gameplan. StockNews.com . https://stocknews.com/news/gild-otsky-alxn-cort-gilead- sciences-gild-earnings-forecast-and-gameplan/ Virology, Oncology and Inflammation Pipeline | Gilead . (n.d.). https://www.gilead.com/science- and-medicine/pipeline