Building Deals on Bedrock

by David Harding and Sam Rovit

WHETHER THEY LIKE IT or not, most CEOs recognize that their companies can’t succeed without making acquisitions. It has become virtually impossible, in fact, to create a world-class company through organic growth alone. Most industries grow at a relatively slow pace, but investors expect companies to grow quickly. Not everyone can steal market share, particularly in mature industries. Sooner or later, companies must turn to acquisitions to help fill the gap.

Yet acquisitions can be a treacherous way to grow. In their bids for new opportunities, many companies lose sight of the fundamental rules for making money in their industries. Look at what happened to manufacturing giant Newell. ...

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