Would you consider acquiring a target solely based on the culture?
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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.
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.
No. The company should aim to maximize shareholder wealth. If this will not be achieved, it should not pursue such deal.
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.
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.
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.
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.
Yes, provided you want to adopt the acquiring culture in your organisation that could potentially lead to profit.
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.
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.
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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