He then joined a French counterpart Alliance health

Grow a business in a sustained and regular manner has always been at the centre of the concerns of the leaders. The reasons are various: minimum size to benefit from scale effects, new global deal imposing ever-greater critical mass, defensive anti-OPA or, just sometimes, ego of the head of enterprise which is reflected in the value of the turnover which it manages. The growth of a company can refer to several indicators: size, number of cases, result and shareholder value... If these concepts are of course intrinsically linked, our comments here focuses on the growth of the result in the medium term, the most closely related to the evolution of stock market.

One of the ways used to support a growth strategy is the acquisition of company, as opposed to the organic growth or a strategy of partnerships. In 2005, the total volume of mergers and acquisitions has risen to nearly 3,000 million, up 38 on 2004, the best year since 2000. This trend does not seem to stop since the first nine months of 2006 recorded an increase of 32 over the same period of 2005. Recently major operations have also paid the Chronicle:

Mittal and Arcelor, Cemex and Rinker (in progress) for the hostile reaction of the "target" as well as for the atypical nature of acquisition: society in emerging countries doing her "shopping" in the Western economy;

Google and YouTube, News Corp. and MySpace for amounts impressive at stake given the young age of the target, respectively 165 billion and 580 million disbursed for companies "old" just two years at their redemption, which means creation of value between 300 and 800 million dollars a year...

Such transactions allow their acquirers to accelerate their growth in a limited time interval, but also access to new fields of expertise, often favouring a leap forward on the experience curve, especially when these skills are best used in the new entity on the basis of the underlying synergies. Google, for example, has decided not to continue to develop itself its offer of online community site but rather investing in YouTube to catch taken in the last 18 months. Thus, it instantly gets access to tens of millions of YouTube subscribers, to which it will apply its advanced marketing techniques to make this new customer base. Of course, all this has a price, and such acquisitions are shots of hundreds of millions of dollars.

Be careful however not to draw the conclusion that the dollars are a solution to the growth of a company. On the one hand, the choice of the right partner is difficult; on the other hand, it is not only to acquire, but also to integrate! A successful acquisition is measured on the medium-long term the value of profits after integration of the target. If the latter are higher than the respective results of the two parties before the operation, then there is real value creation and successful growth. The bad news is that, according to the selected indicators, 50-80 of these operations are then considered as failures, at least not producing the expected results. Very specifically, the shareholders (or owners of private companies) would be more rich if the acquisition had not taken place... It becomes interesting to examine more closely the players who built their strategy of growth on repeated acquisitions series and are unanimously recognized surplus as strongly creators of value. They have in common is that they have developed over the years: 1) clear and coherent strategies over the long term; (2) specific skills of research and target selection, negotiation and rapid integration, enabling them to consistently succeed their acquisitions.

Look at the cases of Bosch and Alliance Boots, which illustrate two different strategies that a policy of acquisitions can actually create a competitive advantage. Note in passing that these two groups succeeded in generating a steady growth in profits well above average for the firms of the FTSE (13 per year between 2002 and 2006):

innovation-acquisition of key skills: Bosch is recognized as one of the most successful companies for its innovation strategy. The company indeed filed 12 patents per day on average and spends 7 of its turnover in research and development. This innovation policy is based on internal teams of researchers spread on several centres but also on a permanent technology watch is to identify, acquire and integrate businesses generating innovative processes or products. It follows that during the last twenty years, Bosch has made more than 50 major acquisitions, the purchase of the domestic brake of Allied Signal to the resumption of Sigpack, manufacturer of industrial machinery, or, more recently, the integration of Telex Communications, American professional electronics specialist. This policy of acquisitions allows Bosch to acquire fast way of missing and necessary to its development strategy skills. They could probably be developed internally, but on a scale of much longer time, with the risk of losing the competitive advantage linked to the exclusivity of the technology involved;

the vertical integration international development: the case of Alliance Boots is an emblematic example of development internationally through a series of acquisitions, beginning with the creation in the 1980s of Allianza, grouping of purchases of a few tens of pharmacies in Italy. He then joined a French counterpart, Alliance health. Then the company entered on the English market by merging with Unichem in 1997, thereby extending its geographical coverage while taking control of a small chain of pharmacies. Over the period 1999 to 2005, the new group, Alliance Unichem, spread in Spain, Czech Republic, Holland, Portugal, Germany and Russia mainly

by acquisitions. These activities positionnèrent the company as one of Europe's pharmaceutical leaders in the wholesale distribution and retail. In 2006, Alliance Unichem and Boots, large network of pharmacies and signs of beauty in the United Kingdom and in Europe, merged to create a group of 20 billion euros of turnover. Acquisitions here allowed rapid international development and integration downstream in the distribution with Boots. Effects volume and control of distribution costs give the new entity favourable positioning to competitors.

These examples, as well as by analysing in detail a number of companies successful growth by repeated acquisitions strategy, there is that readable and consistent strategies over time were followed but also that these companies have simple lessons that underlie these successes:

the acquisitions policy is clearly anchored in the group policy. At Cisco, for example, which acquired a hundred companies in the past 20 years to build a dominant position in telecommunications, the permanent search for targets is an activity which is an integral part of the strategy of research and development. Dedicated teams scrutinize the market, identify opportunities, negotiate and integrate in a limited time. The research process is very marked and for each acquisition carried out a dozen candidates were previously analyzed. On average, each operation is completed in three months.

the integration process begins long before the official date of the transaction. Indeed address the issue of integration from the phase of "due diligence" can save valuable time by identifying potential barriers, or even major problems that could lead to stop discussions. In very early thinking about the new model, the future organization, the plan of implementation of identified synergies, it reduces the risk of bad surprises, some unexpected reactions of the other party, unforeseen delays, the concerns underlying estimates of overly optimistic earnings hardly pass the test of the implementation-related...

management integration is an occupation full time and should be recognized as a separate function, like marketing or finance: when the acquisition process is a strong growth strategy element, it is more than one temporal task related to a specific operation but actually an ongoing activity that underpins the strategy of the company. Cisco has set up dedicated teams attached to management that integrate the companies acquired. These are organized according to specific sites, the integration of computer systems, the Organization of the new roles, through the systematic meeting major customers within three months of integration. The position of Director of integration is strategic at General Electric. The latter deals solely integrations, being relieved of liability business. Therefore it is dedicated to the integration of cultures, teams and processes, without to be linked to earnings growth considerations, allocation of resources...

organisational decisions must be taken, announced and implemented as soon as possible: once the acquisition is formalized, the expectations of a clear communication became every day more important. A gap often exists between on the one hand, the Directorate-General, aware of the details of the operation and future organizational directions, living in euphoria of prospects of creation of value, and on the other hand, managers and other employees including the main issue is often: "I still have a position in the new structure". The feared scenario is that the "opposing" party place its own teams, change strategy, changing internal processes, restructures, consolidates and "absorbs" the target. Therefore, feelings of uncertainty, or even of insecurity or anxiety: "can we have confidence in the other group, what are its real intentions, is our management defend us... well. . Best practices for rapid communication, observed in Alliance Boots, based on organization of track in the days following the merger, bringing together senior two organizations to meet and begin to work together (see below). The next step is then to decline information quickly to all levels of the company following a specific plan as to the content and formats;

Finally, confrontation of different cultures in an acquisition is a major etpeut be facilitated by quickly putting teams working on the resolution of practical problems, to generate the first success. The issue is to work together teams from different cultures, which in some cases were even competing a few weeks previously. At General Electric, the Directorate is floor managers on a plan of the first 100 days, creating multicultural teams embarking on specific initiatives. Focusing on concrete operational activities by definition, the individual political considerations are relegated to the second plan and often fade themselves.

In conclusion, clear strategies, enrolling in the long term, and sharp skills acquisition and integration appear to be the fundamental ingredients of a recipe to be called "successful growth through acquisitions. In proceeding to a detailed analysis of the strategies followed by the champions of growth, particularly those which inherently bind their strategy to a policy of acquisitions supported, can identify a number of common characteristics. That said it needs to be modest because the acquisition is a permanent challenge for the purchaser. Indeed each operation is unique, with its own specific cultural, strategic, organizational... Regardless of the number of models and lessons learned from previous acquisitions, the following operation is always different and is as much art as science. Simply, some companies have managed to accumulate over the years of experience to develop own growth by procurement skills, now an integral part of their DNA