Not all M&As are alike - and that matters

Despite all that's been written about mergers and acquisitions, even the ex perts know surprisingly little about them. The author recently headed up a year-long study sponsored by Harvard Business School on the subject of M&A activity. In-depth findings will emerge over the next few years, but the re search has already revealed some interesting results. Most intriguing is the notion that, although academics, consultants, and bu sinesspeople lump M&As together, they rep resent very different strategic a ctivities. Acquisitions occur for the following reasons: to deal with overc apacity through consolidation in mature industries; to roll up competitors in geographically fragmented industries; to extend into new products and ma rkets; as a substitute for R&D; and to exploit eroding industry boundaries by inventing an industry. The different strategic intents present distinct integration challenges. Fo r instance, if you acquire a company because your industry has excess capac ity, you have to determine which plants to shut down and which people to le t go. If, on the other hand, you buy a company because it has developed an important technology, your challenge is to keep the acquisition's best engi neers from jumping ship. These scenarios require the acquiring company to e ngage in nearly opposits managerial behaviors. The author explores each type of M&A - its strategic intent and the integra tion challenges created by that intent. He underscores the importance of th e acquiring company's assessment of the acquired group's culture. Depending on the type of M&A, ap preaches to the culture in place must vary, as will the level to which culture interferes with interation. He draws from the e xperiences of such companies as Cisco, Viacom, and BancOnr to exemplify the different kinds of M&As.