Much has been made of the importance of cultural compatibility in mergers and acquisitions. But for serial acquirer IBM Corp., the issue is not one that will make or break the decision to pursue a deal.
During a presentation Tuesday at the Conference Board's Post Merger Integration Conference in San Francisco, Moni Miyashita, managing director in charge of mergers and acquisitions integration at IBM, said the company will go ahead and pursue a target, even when it sees a culture clash, understanding up-front that it will have to work harder to bring about a cultural integration after the merger.
"We will not not do a deal because we are not compatible," said Miyashita. "It's not about compatability. It's about recognizing value."
The approach contrasts with the stated practice of other serial acquirers like Cisco Systems Inc., which has said it will walk away from otherwise promising acquisitions when it doesn't see a good cultural fit.
As Miyashita describes IBM's corporate development strategy, she said acquisitions are too vital a part of the company's overall growth to be dismissed simply because they will take work to blend the two cultures.
"Every year when we go through our business plan, we set targets for organic growth, and inorganic growth," she said, stressing that acquisitions are regarded as a central part of corporate growth and that IBM is currently targeting 20 to 25 acquisitions per year. "Our general managers cannot reach their goals without acquisitions." —Andrea Orr
See June 11, 2007, story on IBM's software acquisitions
See Corporate Dealmaker story on Cisco's acquisition strategy
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