Why Do Acquisitions Fail?
It is difficult to offer the measure of success and failure in the survey. It is concluded after survey that acquisitions fail. The reasons for the failure of acquisitions were put forward. They are: flawed business logic, flawed understanding of the new business, flawed deal management, flawed integration management, and flawed corporate development. Acquisition is considered as a high risk plan which is not universal and does not have a simple growth formula. The company which is in its own difficulty cannot be helped by the other companies. The Compaq and digital companies had to follow fierce competition in the markets. After getting merged, the business will not get integrated so easily and the performance of the business will not be so exciting.
The acquiring company must have a planning which adds value. If the acquirer is not driving good business, then the acquisition will accelerate the business. For example, AT and T was acquired into IT and it included NCR into the strategy. This integration did not click and many billion dollars were lost in the business after the acquisition process. The ITT Company created a wide range of groups from hotels to pumps. This did not work out well as one of the groups did not go for acquisition and the management could not use the assets of the group.
Dyson Company has acquired one-third of the vacuum cleaner business when Hoover could not handle the business properly as it did not offer any technology license. Toyota could click as luxury car provider after joining Lexus group. Acquisition is not so easy and it has to be attained by spending lot of time and money to reach the desired target and get the desired results. The acquirer must know that the target company is making money well. After acquisition, the integration will stabilize if there is consistently hard work to achieve the benefits of the process.