An active market for corporate control drastically reduces the chances of success for acquiring companies. Even in situations where the acquired company is in the same line of business as the acquirer and is small enough to allow easy post-merger integration, the likelihood of success is only about 50 percent.

A disciplined acquisition program is essential. You must have control of the process. Don't rely on the deals brought to you by third parties. Find your own targets, starting with a self-analysis that leads to a value-adding approach.

Identify useful knockout criteria in the screening process. Before bidding on a candidate, understand exactly how you intend to recoup a takeover premium. Try to find synergies that are unique—those that cannot be captured by another bidder. Decide on your maximum price and stick to it as part of a carefully planned negotiation strategy. Finally, move as quickly as possible during post-merger integration and carefully manage the process.

Joint ventures are a form of alliance that permit temporary relationships that focus more specifically on parts of the business system. Although they are successful for both partners only about half of the time, their success rate is improved if there is a low geographical overlap, and if the alliance is provided with autonomy and flexibility between two strong parents with equal ownership.

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