1) 2) 3) M&A seems to be the most critical factor in expanding the market capitalisation of a corporation.

Acquiring is much faster than building, McCaw. Track Worldcoms market cap. Speed to market, speed to positioning, speed to becoming a viable company. For Internet companies especially, speed is crucial and M&A is the fastest way to expand and solidify their businesses. GeoCities and Yahoo! Worldcom has benefited from speed, later example has mentioned about it 4) Acqs is a good way to add a product line or distribution channel that would be too costly to build up from scratch. What is Ed Liddys industry? Only if we dont have the knowledge, and if we see a company that provides a good strategic fit, will we go the buy route. Use medical example to counter here Internal failures do not get as much attention as M&A failures. Link to the German example, changes only happen when it is not forced. 5) Denniss logic is that you can define, measure and capture cost synergies relatively easier, but theres more risk with revenue enhancements, and they are much more difficult to implement. Medical business example. Cutting costs does not really mean anything if eventually we cannot grow revenue 6) An acq becomes attractive if it offers us a new consumer segment or geographic market to sell our products to or if it adds new products to one of our core categories. If we venture too far from our core competencies, the risk is not worth it. Theyd take profits from good, established businesses and put money into the next high technology. But they usually did not have the management talent to support the new products or the services that they were investing in VF realised that they cant just go out and buy technology companies because they have a whole different mindset and pace compared to apparel companies. They still cannot lose sight of the fact that they are still very dependent on the traditional retail channels. You do not want to undermine 98% of the business for the sake of a 2% opportunity. 7) a good rationale is a necessary condition for integrating the businesses. Need to take care of management style. If you have a good rationale and ca persuade someone to visualise it, then people can put aside cultural differences and work hard towards that goal. However, if lack of it, why would people move out of their comfort zones and put extra effort to work for something which is futile in their opinion? European management tends to be generally less aggressive in cutting costs than guys in the US, perhaps because margins have been traditionally higher in Europe. When you buy a company outside the US, you really need to know what youre getting into, and thats hard to get at in due diligence. 8) can echo my opinion in 7. All we expect people to do is stay on the road within

the bounds of our strategy and our principles of doing business. You need to adapt to local ways of doing things. PwC, trying to build a company between two parties which have been competing with each other for 40 years. You need to build trust, and that takes a lot of managerial attention and time. You do not want to completely integrate sometimes, what you do with an acq depends on the channels and the products that you and the acquired company are in. 8) At the beginning of negotiations, you tend to concentrate more on the business portfolio, but as he deal advances, your focus switches to people and processes. Read the rest of Raj Guptas remark. Especially back office, maybe need two guys to check and stuff like that. Ed Liddy thinks that the work of integration really needs to start when one is planning the acq because its tied up with the whole reason one is buying the company. Whats the logic? Is it cost takeout? And you have o face a room of people asking, Whats happening to me? You need to give time for people to acclimatise, tie it back to revenue motivation, but then again, I think the catch is, if you can easily let people visualise how it s gonna work, ou will be fine, but need to take care that sometimes plans might not work out. Inevitably, people immediately start thinking about themselves, so moving fast and getting the right people in place are extremely important. You need communication to avoid parlysis and maintain morale. In the drive to complete a deal, it is easy to lose sight of the concerns of customers. Theres almost never any detailed analysis in due diligence of how customers will react or of pros and cons of the deal from their point of view. The challenge is finding people who are prepared to represent the interests of all shareholders