To improve the odds for success with its acquisitions, a firm should:
A)Engage its rivals in a bidding war.
B)Look for potential firms with high acquisition premiums.
C) Conduct due diligence concerning strategic and organizational fit.
D) Only acquire after participating in an alliance first.

Question

To improve the odds for success with its acquisitions, a firm should:
A)​Engage its rivals in a bidding war.
B)​Look for potential firms with high acquisition premiums.
C) ​Conduct due diligence concerning strategic and organizational fit.
D) ​Only acquire after participating in an alliance first.

Quizplus · Accepted Answer

Conducting due diligence concerning strategic and organizational fit is important to improve the odds for success with acquisitions. This involves analyzing if the acquired firm aligns with the acquiring firm's goals and values, and assessing whether the two firms have compatible structures, cultures, and resources. This increases the likelihood of integration and a successful transition. Engaging in a bidding war or only acquiring after participating in an alliance may not necessarily lead to a better outcome. Looking for potential firms with high acquisition premiums may be a sign of a sought-after target, but it does not guarantee success in the integration process.

To Improve the Odds for Success with Its Acquisitions, a Firm