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Recommended: 5 successful acquisition types

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The five types of successful acquisitions

Companies advance myriad strategies for creating value with acquisitions—but only a handful are likely to do so.

There is no magic formula to make acquisitions successful. Like any other business process, they are not inherently good or bad, just as marketing and R&D aren’t. Each deal must have its own strategic logic. In our experience, acquirers in the most successful deals have specific, well-articulated value creation ideas going in. For less successful deals, the strategic rationales—such as pursuing international scale, filling portfolio gaps, or building a third leg of the portfolio—tend to be vague.

Empirical analysis of specific acquisition strategies offers limited insight, largely because of the wide variety of types and sizes of acquisitions and the lack of an objective way to classify them by strategy. What’s more, the stated strategy may not even be the real one: companies typically talk up all kinds of strategic benefits from acquisitions that are really entirely about cost cutting. In the absence of empirical research, our suggestions for strategies that create value reflect our acquisitions work with companies...

To continue reading please follow link to McKinsey Quarterly website.




Author:Marc Goedhart, Tim Koller & David Wessels; McKinsey Quarterly

Source:http://www.mckinseyquarterly.com/The_five_types_of_successful_acquisitions_2635