Hear, hear Mr Cochlear

A nice quote from Cochlear CEO, Dr. Chris Roberts yesterday:

“Growth by acquisition is a tough gig. More companies die from indigestion than starvation.”

Pretty much sums up what I was teaching in class this week about diversification and M&A. Firms need to avoid the synergy bias and think very carefully before taking on the task of extracting more benefits than costs from takeovers.

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One Response to “Hear, hear Mr Cochlear”

  1. Steve Sammartino Says:

    Love it – every takeover I’ve been involved in at Kraft foods – who buy everyone (latest being Cadbury) resulted in market share of the new brands invariably declining post acquisition.

    I think investment guru Peter Lynch summed it up best when he said what out for ‘Diworsifications’.

    Steve.

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