Understanding how to handle the acquisition process : a case study of ITAB Shop Concept AB

Acquisitions for a value of approximately $2 trillion are conducted globally every year with the motives of i.e., enhanced market power and increased shareholder value. Despite the interest in acquisitions the failure rate on acquisitions in 2011 was estimated to 70-90 %. Thus researchers have called for further examination on acquisitions and especially on the acquisition process, and strategic fit and organizational fit, which is believed to facilitate the outcome of the acquisitions. The acquisition process is described as a linear process con- sisting of two sub processes, pre-acquisition and post-acquisition, that acquiring organiza- tions progress through step-wise. The purpose of this study is to examine how the acquisition process and strategic fit and organizational fit can be handled to facilitate successful acquisitions. In order to get a deep and comprehensive understanding of the acquisitions process, the authors of this thesis have conducted a case study. The company, ITAB Shop Concept AB, has a background of 20 successful acquisitions, which have contributed to a steady growth in both turnover and share price. ITAB Shop Concept AB has been researched through in- depth interviews with key persons in the management, responsible for the acquisitions conducted. By adopting a dynamic approach to the acquisition process and taking an overall view of the strategic fit and organizational fit in each phase of the acquisition process, organiza- tions can understand and prevent the possible issues leading to failure. Furthermore organ- izations might benefit from having an acquisition process adapted for each acquisition tar- get. For example it is found that by conducting due-diligence in the post-acquisition pro- cess instead of the pre-acquisition process, and keeping the same persons in the acquisition team, more efficient use of resources and prior experience is facilitated.