Six Rules of Successful Acquistions

Acquisitions should be successful, but few are, in fact.

Acquisitions should be successful, but few are, in fact. The reason for this nonperformance is always the same: disregard of the well-known and well-tested rules for successful acquisitions.

The six rules of successful acquisitions are:

1. The successful acquisition must be based on business strategy, not financial strategy.
2. The successful acquisition must be based on what the acquirer contributes to the acquisition.
3. The two entities must share a common core of unity, such as markets and marketing, or technology, or core competencies.
4. The acquirer must respect the business, products, and customers of the acquired company, as well as its values.
5. The acquirer must be prepared to provide top management to the acquired business within a fairly short period, a year at most.
6. The successful acquisition must rapidly create visible opportunities for advancement for both the people in the acquiring business and people in the acquired business.

ACTION POINT: Evaluate three acquisition prospects against these six rules. Which ones would you recommend that your organization pursue?

The Frontiers of Management
The Successful Acquisition (Corpedia Online Program)

* Source: The Daily Drucker by Peter F. Drucker