The Hindu Business Line : Acquisitions that work

Apropos the article “Making acquisitions work” (Business Line, October 27, 2008) most of the acquisitions are made to expand a business inorganically and to increase the percentage of market share.

When such a decision to grow inorganically is taken, the costs of the acquisitions tend to be higher as the counter party knows the purpose of negotiations and jacks up the price, leaving the calculations made under due diligence process in the initial stages in disarray.

However, if the decision to acquire a company has been taken with the objectives of seeking either cost and revenue synergies or to augment the supply lines of raw materials, such a decision is bound to be successful with least effort and focused application on management issues in the post-acquisition stage.

The focussed application should be on integration of the HR and management processes to ensure that conflicts of authority do not crop up and to keep the objectives of acquisitions in mind.

P. E. Muthu, Mumbai

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