3 ms·
> Mergers are always risky. CEO can do all the analysis possible but can't know for sure if combined company will do better or worse than individual parts. That
by nmfisher 7y ago
> Mergers are always risky. CEO can do all the analysis possible but can't know for sure if combined company will do better or worse than individual parts. That part of the job is called "taking calculated risks".
True, but growth-by-acquisition is a lot "easier" than organic (R&D-driven) growth, particularly when money is cheap.
A CEO looking for a quick win - usually quarterly, sometimes annually - will almost always default to an acquisition. It won't be clear for at least 2-3 years whether or not it was worthwhile.
I think a CEO who spurns acquisitions in favour of organic R&D will always, almost by definition, be putting the company's interests ahead of his/her own.