Big is better – but not always : Focus needed in going for growth by M&A

Purpose – To consider the motives for and expectations of mergers and acquisitions from various perspectives. Design/methodology/approach – This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context. Findings – There appears to be a growing consensus that a more focused view must be taken of acquisitions, as many shareholders reject the notion of acquisitions as a means of spreading risk. A relatively small company wishing to grow by buying up failing competitors takes a very different view from a large company that wants to acquire more global brands. Whatever the motivation for acquisitions, a strong business case must be made – many shareholders have discovered the hard way that bigger does not always mean better. Originality/value – Encourages businesses which are considering mergers or acquisitions to avoid the temptation for “empire building” for its own sake and to have sound, strategic motives for their bid for growth by acquisition. Gives examples of how companies have grown and their perceptions of acquisition and mergers as a means of growth.