The ABCs of M&A

On the Dx yesterday, as we took a look at Google’s proposed purchase of Motorola Mobility, we referenced Peter Drucker’s Five Rules of Successful Acquisitions. Here’s an abridged form of Drucker’s five rules, for your easy reference:

1. An acquisition will succeed only if the acquiring company thinks through what it can contribute to the company it is buying, not the other way around.

2. Successful diversification by acquisition requires “a common core of unity”—that is, a commonality of markets or technology that provide a sufficient unity of experience, expertise and language.

3. Those in the acquiring company must respect the products, markets and customers of the company they acquire.

4. Within a year or so, the acquiring company must be able to provide top management for the company it acquires.

5. Within the first year of a merger, it is important that a large number of people in the management groups of both companies receive substantial promotions across the lines—that is, from one of the former companies to the other.

How well do you think Google will live up to these principles when it comes to Motorola?