Making a Better Trade in Acquisitions
Competition has always been an important thing in America. No matter what
line of business you're in, how young or how old you are, you want to be on
the winning side. Sometimes both sides win, which is the way most transactions
are conducted today. The days of crushing the other person in a deal has
gratefully passed. But the bottom line is that at the end of the day, you are
the one who has made the better trade.
This better trade game starts when we are children. When choosing sides for
the softball team on the playground, each captain wants to ensure he made a
better trade or a better team selection. A series of better trades or better
choices will make it easier to field a winning team.
This better trade game gets carried over to the school lunchroom. How many
times did you trade lunch ingredients, either the stuff packed by a parent or
the food slathered on the tray? Want to swap your brownie for my turnips? No
way! That would not be a better trade.
The better trade game continued in college. Remember this one: I missed math
class on Tuesday, so I'll trade you notes from English Lit for notes to your
math class. That's the sort of win-win better trade that makes everybody happy.
The better trade game continues in adulthood. I'll work this weekend if you
can work next weekend. I'll let you use my car for your date if you'll help me
move my furniture up three flights of steps. I'll buy dinner today if you'll
buy next time.
The better trade game never stops, but the stakes continue to grow in
importance. Once established in business, relationships continue to grow in
importance. You establish connections and make friendships, and then watch
them grow. Before long you're doing business with each other and offering
professional assistance. Furthermore, you start to share alliances and conduct
business with friends. Soon you start to make a better trade with people
outside your own little circle of influence.
At some point you begin to ponder who makes the better trade. You still want
to help your friends as best and as often as possible, but you realize the
need to look more closely at the bottom line. You don't necessarily want to
win a transaction - both sides can still succeed - but you want to make sure
your half of the deal has been good. You crave making a better trade.
As much as the better trade game is important to individuals, it may be even
more for companies and multinational corporations. If they slip up and fail
to make a better trade, it can cost the company and its shareholders millions
and millions of dollars. Corporations have much more on the line when they
make a trade or acquisition. They must be sure the exchange will be
productive for their bottom line. Failure to do so could cost the
irresponsible party their job, and swapping a high-paying, high-profile
position with a huge corporation for the unemployment line is definitely not
a better trade.