Acquisition Integration Approaches

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Definition: Acquisition Integration Approaches

The model provides guidance as to the optimal approach that should be adopted for a successful integration of an acquired firm. It gives 4 approaches based on 2 criteria which are need for-

a. Strategic Interdependence

This refers to the combined value created after acquisition which should obviously be greater than the value of both the firms combined together. Value creation can be in many forms like increased resources, skills or combined benefits.

b. Organizational Autonomy

This factor refers to the amount of autonomy that must be retained by the acquiring firm.

Based on the differential need for the above two factors, Haspeslagh and Jemison have defined the following four approaches of effective acquisition-integration-

1. Preservation

Here the focus is to preserve the acquirer’s autonomy and nurture the second firm under it.

2. Symbiosis

This is a very difficult task where both the factors have to be satisfied and work moves gradually.

3. Holding

Here, the focus is mainly to create value through financial resource sharing and autonomy needs are low, i.e. integration is not given much weightage.

4. Absorption

This approach is highly inclined towards focusing on generating the required value from the acquisition even if that might demand a loss of autonomy or slower/lesser integration.


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