Xchanging acquires e-Sourcing tech co. MarketMaker4
Announcement from Xchanging, one of the world’s top business processing, technology and procurement services providers
Xchanging plc, the business process, procurement and technology services provider, has announced that its subsidiary, Xchanging Inc. has acquired MarketMaker4 (MM4), an e-Sourcing technology company based in the USA, for $22 million.
MM4 brings to Xchanging’s Procurement business a proprietary Software-as-a-Service technology platform providing industry-agnostic procurement e-Sourcing, business intelligence and dedicated customer support (MarketMaking). The acquisition increases the procurement services Xchanging offers, as well as contributing to the company’s technology-enablement strategy.
This will help consolidate Xchanging’s position as the world’s third largest procurement provider, as it follows a number of recent new customer wins for Xchanging’s Procurement business, with several for the US business specifically.
MM4 will continue to be marketed under the same name in order to leverage its well-established position in the e-Sourcing market. This will support Xchanging’s strategic global growth strategy by extending its presence in the USA, a region which has significant growth opportunities for the procurement business, whilst also creating business development opportunities for Xchanging’s existing procurement products and services.
Ed Cross, Executive Director, Xchanging Procurement Services, said: “This acquisition, based on an existing commercial relationship, opens up significant opportunities for Xchanging Procurement Services (XPS) to expand its service and product offering into a new market (e-Sourcing) whilst expanding both MM4 and XPS’ customer base and market opportunity.”
MM4 has an existing customer base of over 35 companies and growing, with clients in countries including the USA, Canada, Mexico, China and the UK. Customers are spread across a wide range of industries, with a particular focus on the manufacturing and retail sectors. Headquartered in Chicago, with further offices in London and Dubai, MM4 was founded in 2011 by Chirag Shah, Dave Bowen and Alan Buxton. They will remain as shareholding directors with the business, bringing additional specialist business development expertise to Xchanging.
Cross added: “The MM4 solution, already utilised in XPS, has a number of distinct features that many customers have already taken advantage of, which alone can bring very real advantage to procurement practitioners. Coupling this with XPS’ extensive outsourcing service globally and underlying technology solutions will ensure that the combined business continues to meet the evolving requirements of the growing procurement outsourcing marketplace successfully.”
Chirag Shah, MM4 Co-Founder and Chairman, said:“In the space of only a few years, MM4 has become well established in the corporate procurement market, particularly in the US. Being part of Xchanging, who first came to us as a customer, will provide the opportunity and the resources to accelerate our growth and allow MM4 to assume a leadership role in the Spend Management sector.”
EU and US agree end to Airbus-Boeing supply chain tariffs
The EU and US have agreed to resolve a 17-year dispute over aircraft subsidies, suspending tariffs on billions of dollars' worth of goods that have plagued procurement leaders on both sides of the Atlantic.
Under an agreement reached by European Commission Executive Vice-President Valdis Dombrovskis and US Trade Representative Katherine Tai on Tuesday, the tariffs will be halted for a period of at least five years.
It will bring an end to punitive and disruptive levies on supply chains that have little to do with the argument, which became embroiled in the trade battle. Businesses on both sides of the dispute have been hit with more than $3.3bn in duties since they were first imposed by the US in October 2019, according the EC.
The US imposed charges on goods upto $7.5bn in response to a World Trade Organisation ruling that judged the EU’s support of Airbus, its biggest aircraft manufacturer, unlawful. A year later in November 2020, the EU hit back. The WTO found the US had violated trade rules in its favourable treatment of Boeing, and was hit with EU duties worth $4bn.
In all the tariffs affected $11.5bn worth of goods, including French cheese, Scotch whisky, aircraft and machinery in Europe, and sugarcane products, handbags and tobacco in America. Procurement leaders on both sides of the fence were forced to wrestle with tariffs of 15% on aircraft and components, and 25% on non-aircraft related products.
Boeing-Airbus dispute by the numbers
- The dispute began in 2004
- Tariffs suspended for 5 years
- $11.5bn worth of goods affected by tariffs
- $3.3bn in duties paid by businesses to date
- 15% levy on aircraft and 25% on non-aircraft goods suspended
Both sides welcome end to tariffs
European Commission President Ursula von der Leyen branded the truce a “major step” in ending what is the longest running dispute in WTO history. It began in 2004.
“I am happy to see that after intensive work between the European Commission and the US administration, our transatlantic partnership is on its way to reaching cruising speed. This shows the new spirit of cooperation between the EU and the US and that we can solve the other issues to our mutual benefit,” she added.
Both aircraft manufacturers have welcomed the news. Airbus said in a statement that it will hopefully bring to an end the “lose-lose tariffs” that are affecting industries already facing “many challenges”. Boeing added that it will “fully support the U.S. Government’s efforts to ensure that the principles in this understanding are respected”.
The US aerospace firm added: "The understanding reached today commits the EU to addressing launch aid, and leaves in place the necessary rules to ensure that the EU and United States live up to that commitment, without requiring further WTO action."
This week’s decision expands upon a short-term tariff truce announced in March this year. The EC says it will work closely with the US to try and further resolve the dispute, establishing a Working Group on Large Civil Aircraft led by each side’s trade minister.
Airbus last month signalled to suppliers that post-pandemic recovery was on the horizon, telling them to scale up to meet a return to pre-COVID manufacturing levels. “The aviation sector is beginning to recover from the COVID-19 crisis,” said Airbus chief executive Guillaume Faury, adding that suppliers should prepare for a period of intensive production “when market conditions call for it.”