Published by:
Harvard Business Publishing
Length: 10 pages
Topics:
Acquisitions; Corporate strategy
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https://casecent.re/p/48142
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Abstract
Formal guidelines help companies identify and screen acquisition candidates. Two examples illustrate how the process of developing acquisition guidelines differs in focus and content between related diversifications and unrelated diversifications. In both cases, acquisition guidelines relate closely to corporate strategy. The screening process also provides a critical analysis of differences of opinion and improves the consistency between corporate objectives and resources. The procedure''s final step involves comparing the candidate''s potential for value creation to the cost of the acquisition as well as to the company''s other investment opportunities.
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Abstract
Formal guidelines help companies identify and screen acquisition candidates. Two examples illustrate how the process of developing acquisition guidelines differs in focus and content between related diversifications and unrelated diversifications. In both cases, acquisition guidelines relate closely to corporate strategy. The screening process also provides a critical analysis of differences of opinion and improves the consistency between corporate objectives and resources. The procedure''s final step involves comparing the candidate''s potential for value creation to the cost of the acquisition as well as to the company''s other investment opportunities.