Thursday, June 11, 2009

Acqusitions by Indian companies - part 2

So here's what they should have done (and do in the future) - see how value is being created through an acquistion - remember there is no such thing as a merger of equals - value is rarely created in a merger. And once they figure that out work towards putting in place a plan that generates value - for the acquirer and the acquiree . They (and all others) should avoid the LIB syndrome - create a value target and then force managers to achieve it, by hook or by crook (LIB stands for the Loser Investor Banker).

If Indian companies cant figure out how value is being created for the new company and put specific processes in place to drive the value creation opportunities, they should avoid acquisitions.

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