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ACQUIRE = Don't kill yourself to outperform the competition when you can just buy them!

Discussion in 'Investments' started by K, Apr 22, 2015.

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  1. K

    K Member

    A really interesting new member @Investor just posted this:

    "ACQUIRE, ACQUIRE, ACQUIRE = Don't kill yourself to outperform the competition when you can just buy them"

    Work from home hacks! (SUPERLIST) | Entrepreneur Forum | EntrepreneurFix

    It was a real eye opener for me, what are your thoughts on acquisitions within your company, what % have you spent on acquiring the competition etc? Good and bad stories!
  2. Investor

    Investor Member

    A lot of folks believe the bigger company always acquires the smaller one. This isn't always the case. For two of our acquisitions we purchased the larger competitor. One was a simple transaction using creative finance options. The other was hostile, and we had to buy enough shares to gain seats on the board and force a vote, which could have backfired.

    It didn't end well, but a great case study for those interested in acquisitions is "the case of the goldfish swallowing the whale." The goldfish being Porsche, and the Whale being VW. Porsche became very aggressive and went after VW, acquiring 75% of the shares, and it looked like they had pulled it off.

    It backfired due to an insane law in Germany, and Porsche is now yet another VW product. We live in a conglomerated world. VW owns Audi, Bentley, Lamborghini, Porsche, Bugatti. Many of the brands we know today are owned by a handful of companies; especially in the luxury goods segments.

    The link I provided regarding Porsche is just part of the story. It's an interesting story. Anyone willing to take the time to do some research on the stages of that acquisitions evolution can gain some quality insight into the processes involved. Here's a second link with some more information pertaining to how things unfolded after the previous story was written. Obviously that's a larger scale, but you can also apply similar tactics to smaller scale, and even web-based businesses.

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