Would you consider acquiring a target solely based on the culture?

  • This topic has 28 replies, 27 voices, and was last updated 2 months ago by Kevin Pursel.
Viewing 13 posts - 16 through 28 (of 28 total)
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    Posts
  • #38987
    Mohamad Alchalabi
    Participant

    If this culture could enhance my shareholders’ value return, then it certainly should be explored.

    #38988
    Greg Kitchen
    Participant

    Definitely not solely based on culture. Culture is a key factor but not the sole factor. For M&A, Financial value seems like most important followed closely by strategic purposes.

    #38992

    My opinion is that Unless cultures are quite similar, if you try merge two differnt cultures, you will fail in both.At best,You will buy the company with another culture and culture of the company bought will probably dissapear along with its people.Culture is something that cannot be bought, it is formed from within.

    #38997
    Ahmed Zainalabedin
    Participant

    No. The company should aim to maximize shareholder wealth. If this will not be achieved, it should not pursue such deal.

    #39004
    Joaquin Blanco Diez
    Participant

    How would you measure a “good” culture that is not producing good results? To me, a culture that is systematically producing not good results is not working and hence it does not make sense to acquire it.

    #39013
    Charles Ladas
    Participant

    I would say no. While culture is a huge factor in an acquisition decision, there are a myriad of other factors to consider when evaluating whether the target would be a good fit.

    #39028
    Boon Hon Low
    Participant

    I would attempt to value the culture into the business case. Similar to valuing intangibles, it will not be an easy one. I would approach the valuation by asking what is the impact to company’s revenue and costs if such culture is destroyed after merger.

    #39033
    Mohammad Alageeli
    Participant

    I think it is hard to get the required support from management, board and lenders if the numbers are not promising. I thing you can adapt a certain culture to your business without going M&A.

    #39037
    Evgeny Gorbunov
    Participant

    Yes, provided you want to adopt the acquiring culture in your organisation that could potentially lead to profit.

    #39063

    Not per se, but if straegic fit and financials are good, culture fit will be the differentiator

    #39070
    Jesslyn Zeng
    Participant

    This is an interesting question- personally, I think that culture is extremely pivotal in terms of being an acquisition consideration factor. However, an acquisition is typically very complex and involves considerations ranging from not only culture but also to the financial status, business standing, management team as well as cost of acquisition. Taking into account the myriad of factors in its entirety instead of looking at factors in insolation would certainly allow for a success of an acquisition.

    #39088
    Aaron Teo
    Participant

    I dont think that I will ever consider a target based on the culture, even though its the heart and soul of the company because, the reasons for not been great could be inter-related to the culture. adopting the culture would also not be so easy especially in the context of an acquisition since there could be a conflict of culture btw 2 corporates. In the end, it could be a losing proposition since the people who were “brought-over” could leave the organisation.

    #39094
    Meg Ver
    Participant

    Culture is one of the incentives to acquire a company but not the only one. Other factors like value to shareholders, technological development, staying competitive in the market, organization’s strategy are equally important in decision of acquisition.

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