According to a very interesting McKinsey Quarterly article, acquisitions are in general successful if they follow one of these objectives:
There are other factors that are normally used as part of a "deal rationale" such as "We are Buying Cheap", "This is a transformation deal", "This is a key part of our roll-up strategy". The research shows that those reasons rarely create value.
- Improve the target company’s performance
- Consolidate to remove excess capacity from industry
- Accelerate market access for the target’s (or buyer’s) products
- Get skills or technologies faster or at lower cost than they can be built
- Pick winners early and help them develop their businesses
There are other factors that are normally used as part of a "deal rationale" such as "We are Buying Cheap", "This is a transformation deal", "This is a key part of our roll-up strategy". The research shows that those reasons rarely create value.
