Beijing Auto: Lucky to Lose Opel

Large and unwise acquisitions are some of the biggest strategic mistakes that any company can make. Beijing Auto should therefore look upon its failed bid for GM's Opel as a blessing in disguise. For the same reasons, discretion may also be the better part of valor with regard to a possible bid for Ford's (F) Volvo.

Abundant evidence tells us the vast majority of acquisitions fail to achieve their objectives or to create value for the acquirer. This is particularly true when it is a cross-border rather than domestic acquisition, when there are vast differences in national and corporate cultures, and when the assets being acquired are technologies, brands, and ongoing operations rather than natural assets buried under the ground. In such situations, a seasoned acquirer engaged in a deal where it is welcomed by the target company's employees may still be able to swing the odds in its favor.