According to most studies, between 70 and 90 percent of acquisitions fail. Most explanations for this depressing number emphasize problems with integrating the two parties involved. That’s perfectly true, but my experience suggests that integration problems are particularly severe in cases you wouldn’t necessarily expect — when the acquisition is a related diversification, that is a “complementary” business, which the acquirer understands quite well. The case of Quadrant illustrates my observation.
Don’t Make This Common M&A Mistake
Diversification only works if customers want the new product.
March 16, 2020
Summary.
The standard explanation for failed M&A deals points to integration as the problem. It turns out that this is more of a problem for companies that are acquiring complementary businesses that they know quite well. That’s because integrating the new business isn’t entirely the story. Your customers need to have a reason to like the new combination, which may require change as well as integration.
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How to develop a winning strategy—and put it to work.