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How to make acquisitions pay off


Acquisitions come under the spotlight of Marc Goedhart, Tim Koller, and David Wessels on the McKinsey Quaterly website, as they explore the five acquisition strategies most likely to create value. The authors admit that "there is no magic formula to make acquisitions successful".

However, they observe from their experience that "acquirers in the most successful deals have specific, well-articulated value creation ideas going in [while] for less successful deals, the strategic rationales – such as pursuing international scale, filling portfolio gaps, or building a third leg of the portfolio – tend to be vague".

While they admit the insight offered by empirical analysis of specific acquisition strategies is limited because of the wide variety of types and sizes of acquisitions and the absence of an objective way to classify them strategically, Goedhart, Koller and Wessels have observed that the "strategic rationale" for a value-creating acquisition typically falls into at least one of five archetypes. These are:

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