A brick-and-mortar retailer buys an e-commerce platform. An internet technology company picks up a mobile phone manufacturer. A chain of pharmacies announces its intent to acquire a health insurer.
Why Companies Are Using M&A to Transform Themselves, Not Just to Grow
They know they can’t just expand what they’re already doing.
May 16, 2018
Summary.
The current crop of corporate acquisitions goes well beyond the typical defensive, synergy-driven, horizontal integration that marked previous M&A spurts. These new deals are taking parent companies in uncharted directions. This tells us businesses aren’t acquiring other businesses simply to expand what they’re already doing. They’re doing it because, strategically, they have to – if they want to survive over the medium to long term. The good news is that companies are demonstrating new ways to manage post-merger integration–from hands-off preservation of the target to running it through a holding company–that reduces some of the risks traditionally associated with buying sprees.