The successful acquisition is based on what the acquiring company contributes to the acquisition.

An acquisition will succeed only if the acquiring company thinks through what it can contribute to the business it is buying, not what the acquired company will contribute to the acquirer, no matter how attractive the expected "synergy" may look. What the acquiring company contributes may vary. It may be management, technology, or strength in distribution. This contribution has to be something besides money. Money by itself is never enough.

The acquisition of Citibank by Travelers was successful because the acquiring company, Travelers, thought through and planned what it could contribute to Citibank that would make a major difference. Citibank had established itself successfully in practically every county of the world and had, at the same time, built a transnational management.

But in its products and services Citibank was still primarily a traditional bank, and its distributive and management capacity way exceeded the products and services commercial banking can produce and deliver. And Travelers had a good many of these products and services. What it saw itself as being able to contribute was greatly to increase the volume of business the superb Citibank worldwide distribution system and management could sell, and at little or no extra cost.

ACTION POINT: Before making an acquisition, focus on contribution, not synergy.

Everyone should have health insurance? I say everyone should have health care. I'm not selling insurance.

Dennis Kucinich

Lies Have expiry dates but the truth never expires

Oche Otorkpa

Seeing modern health care from the other side, I can say that it is clearly not set up for the patient. It is frequently a poor arrangement for doctors as well, but that does not mitigate how little the system accounts for the patient's best interest. Just when you are at your weakest and least able to make all the phone calls, traverse the maze of insurance, and plead for health-care referrals is that one time when you have to your life may depend on it.

Ross I. Donaldson

The way to misuse our possessions is to use them as an insurance against the morrow. Anxiety is always directed to the morrow, whereas goods are in the strictest sense meant to be used only for to-day.

Dietrich Bonhoeffer

Q: Why do you use swear words on your blog, but never the F word?

A: Because I'm saving the F word for the day when I write a blog post about the for-profit health insurance industry and the way its CEOs become wealthy by not only preying on...