The Seven Deadly Sins On Mergers And Acquisitions
The corporate world contains many examples of failed acquisitions. In an examination of the relationship between business-level competitive advantage and corporate strategy, Michael Porter reported on the acquisition and subsequent divestiture history of "33 large, prestigious U.S. companies over the 1950-1986 period and found that most of them had divested many more acquisitions than they had kept.
One article offered "The Seven Deadly Sins on Mergers and Acquisitions":
- Paying too much.
- Assuming a boom market won't crash.
- Leaping before looking.
- Straying too far afield.
- Swallowing something too big.
- Marrying disparate corporate cultures.
- Counting on key managers staying.
If there is a lack of fit between the two organizations it is not unusual for the merger or acquisition to fail and be dissolved in a subsequent divestiture.