Why Choose Acquisition?
Acquisitions are attractive because
they are quick to execute
they enable firms to preempt their competitors
they may be less risky than greenfield ventures
Acquisitions can fail when
the acquiring firm overpays for the acquired firm
the cultures of the acquiring and acquired firm clash
attempts to realize synergies run into roadblocks and take much longer than forecast
there is inadequate pre-acquisition screening
To avoid these problems, firms should
carefully screen the firm to be acquired
move rapidly to implement an integration plan