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.
Tags: business, Cochlear, corporate strategies, corporate strategy, diversification, finance, indigestion, mergers and acquisitions, strategy
International BS Blog 
April 29, 2010 at 10:14 am |
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.