Many owner/CEOs and corporate managers are starting to look for acquisition bargains in the downdraft of the recession and stock market decline. While bargains likely will be found, many challenges await the unwary acquirer as well.
Are you ready to do a deal and do you have what it takes?
Some of the best advice I have seen on this topic in some time recently came from Chinese Vice Premier Wang Qishan in an exchange with a Chinese businessman seeking government support for overseas acquisitions:
“Do you have a handle on your own management capabilities? Have you analyzed the cultural differences of the two sides? Do you understand the relationship between unionized labor and management in that place? If the other side’s engineers resign, are you really going to send people … overseas, and make the whole company speak [your language]? If you don’t know yourself and know your opponent, then this kind of confidence scares me.” [1]
Here’s the punch line - Know your own company; develop a clear understanding of the target and the terrain; and then, and only then, think about going shopping. In my experience, the educational cost is far higher when you buy first and learn later.
[1] Will China Buy the World? WSJ Deal Journal, 310/09
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