Acquisition Avoidance: When Organisations Turn Their Back on M&A
- Frederic Etiemble
- Jun 6
- 6 min read
Most companies would instinctively think of M&A to grow. When the initiatives in the core/build terrains (e.g. ERP implementation, data initiative, customer excellence, etc.) have either failed or been exhausted in terms of value creation, M&A can often be seen as a quick and easy way of buying in significant growth.
As such, M&A could be labeled the “lazy” growth option in that many think it will require significantly less time and effort than building something themselves or investing in corporate innovation. And perhaps it is that mindset which has contributed to so many M&A initiatives failing to deliver the returns expected of them.
Yet, recent analyses by both Bain and McKinsey show that the vast majority of M&A deals can succeed, provided they are pursued deliberately, with the right internal capabilities and strategic clarity. The problem is not that M&A doesn't work. The problem is that most organisations aren't ready to make it work.
This article is part of our series, Where Are Your Growth Blind Spots?, where we explore the often-overlooked barriers to achieving sustainable growth. Drawing from Vibrance’s Growth Orienteering approach, we aim to help leaders uncover hidden obstacles and unlock their organisation’s full potential.
In this article, we examine Acquisition Avoidance, a bias to avoid M&A that comes from the wide gap between ambition and readiness when it comes to planning for and executing on M&A.
Acquisition Avoidance
M&A often triggers irrational reactions. For many, it evokes either unbridled optimism (“we can buy our way to growth”) or paralysing fear (“we tried this before, and it didn’t end well”).
Yet, the avoidance of acquisitions is not entirely irrational. M&A often involves substantial capital outlays with much at stake. It isn’t like launching a small experiment. It’s a big bet with all the associated risks. If you have $100M in the bank, you can’t afford to place five $50M bets. As a result, M&A remains infrequent, highly scrutinised, and loaded with pressure to succeed.
That said, the problem isn’t M&A itself. It’s how we think about it. Most organisations conflate M&A with big bang mergers - the likes of BHP-Billiton or Fosters-Southcorp - rather than recognising the wide spectrum of smaller, strategic moves that can build capability, accelerate learning, and prepare for more ambitious deals in future. This includes acquiring small players, tech start-ups, acqui-hires, or bolt-on capabilities. These transactions, while modest, help build the muscle required for successful M&A : identifying targets, negotiating deals, and integrating a foreign body into the host organisation. That muscle is what allows companies to act confidently when the right opportunity arises.
Research shows that companies that make M&A a repeatable capability — not a one-off big bet — outperform their peers. According to McKinsey, programmatic acquirers generate a median 2.3% higher total shareholder return than peers.
Still, acquisition avoidance is widespread and manifests as an organisation that...
Rarely considers M&A as a growth lever,
Has failed to add value with past M&A attempts.
Lacks the expertise to identify and integrate acquisitions effectively.
Tool: M&A Readiness Assessment
To help leaders overcome this avoidance bias, we use the Vibrance Growth Map to raise awareness on the ability to leverage acquisitions to create growth.
By looking at the “Buy” horizontal, we can explore how acquisitions can serve multiple strategic purposes:
In buy-core, it could be the acquisition or merger of a direct competitor to grow market share or improve access to customers.
In buy-adjacent, acquiring a player in a related category could allow the business to extend into an adjacent market. This is not just about the obvious option of expanding geographically, but it could be about offering adjacent value propositions to customers. Think of Amazon buying Whole Foods to enter groceries, or PepsiCo acquiring SodaStream to expand into home beverages.
In buy-new, acquiring a startup could provide the technology or talent to explore entirely new business models or spaces.
But awareness and inspiration are only the first steps. To help leaders identify the missing capabilities that could prevent them from succeeding with acquisitions and act accordingly, we developed our own M&A Readiness Assessment tool.
It invites leadership teams to reflect on the critical dimensions involved in M&A and self-assess whether they have the right enablers in place to pursue M&A as a repeatable growth lever based on statements reflecting what low, average and high readiness mean.
The 10 dimensions the tool covers are:
Strategic Alignment – Are your acquisition theses clear and tied to your growth strategy?
M&A Team – Do you have a dedicated, experienced team to manage deals?
Due Diligence – Are you equipped to assess both financial and strategic fit?
Cultural Fit – Can you anticipate and integrate cultural differences?
Timing & Market Conditions – Are you skilled at sensing market timing and acting accordingly?
Deal Negotiation – Do you have the negotiation expertise to structure deals that achieve optimal outcomes?
Integration Management – Are you set up to plan and execute integration effectively?
Value Realisation – Do you have a clear path and metrics to track, deliver, and sustain value post-acquisition?
Post-Merger Integration Governance – Is there a governance model in place to ensure oversight, alignment, and timely decision-making during integration?
Communication & Change Management – Can you manage internal and external communication effectively to maintain momentum and engagement throughout the deal lifecycle?
In many organisations, this assessment can reveal two interesting blind spots:
An organisation with an ambition to grow through acquisitions but whose M&A readiness is overestimated.
An organisation that doesn’t typically consider acquisitions as a growth lever but realises that an M&A capability can be developed systematically like any other business capability.
Subsequently, this readiness awareness can inform actions that contribute to building a more solid M&A capability over time, which ultimately changes the odds of success of each acquisition.
Case Study: the Acquisitions that helped Fujifilm come back from the brink
Known and admired for its ability to survive the disruption of film photography when the digital revolution collapsed the photographic film market, Fujifilm is also a great case study on using acquisitions to systematically jump onto the next growth wave. Over 15 years, Fujifilm leveraged acquisitions to accelerate its transition from a legacy photography business to a global player in healthcare, life sciences, and advanced materials.
Key strategic moves in the "buy" horizontal:
“Buy-Core” Terrain
Fujifilm stabilised its base by acquiring full control of Fuji Xerox (2019), streamlining its document business in Asia-Pacific. This secured cashflow while freeing resources for diversification.
“Buy-Adjacent” Terrain
Leveraging its imaging expertise, Fujifilm entered medical diagnostics by acquiring SonoSite (ultrasound, 2012), Wako Chemicals (lab reagents, 2017), and Hitachi’s Diagnostic Imaging unit (2019-20).
“Buy-New” Terrain
Fujifilm boldly entered new markets with acquisitions like Toyama Chemical (2008), CDI (stem cells, 2015), and Merck BioManufacturing Network (2011). These built the foundation of Fujifilm Diosynth Biotechnologies, now a global leader in pharmaceutical contract manufacturing.
Critically, Fujifilm didn’t bet on a single acquisition. It built a repeatable M&A capability aligned with a long-term strategy, one that allowed the company to explore and grow across all three zones: core, adjacent, and new.
Impact on Growth
One of the remarkable feats has been the company’s ability to keep total revenue roughly steady from about ¥2.3 trillion in the early 2000s, when Shigetaka Komori took the helm, to around ¥2.5 trillion in early 2020s when he stepped down - and now close to ¥3 trillion for the financial year ending March 31st, 2024 - despite the near-total collapse of the legacy film business, which once accounted for more than 50% of Fujifilm’s sales.
By shifting the composition of that revenue away from film to new growth divisions, Fujifilm succeeded in navigating a radical business transformation. In some segments (especially healthcare), they posted double-digit growth rates while the legacy film business collapsed. This is widely considered one of the top corporate “reinvention” stories, attributed in large part to Shigetaka Komori’s leadership and strong programmatic M&A capability.
Overcoming the Acquisition Avoidance Bias
Contrary to other growth blind spots explored in this series, the real issue with M&A isn’t awareness of its potential as a growth lever; it’s readiness. Too many organisations turn to M&A as a silver bullet for their growth ambitions after exhausting growth options in their core business but they fall short of investing the time and effort required to build a programmatic M&A capability as part of their strategic playbook.
Yet, the evidence is clear: companies that treat M&A as a repeatable capability - grounded in strategy, executed with discipline - outperform their peers.
So, ask yourself:
With a programmatic M&A capability, what acquisitions would get you closer to achieving your growth ambition?
About Fred
Executive advisor on strategy and innovation. Co-author of The Invincible Company, a guide to building resilience in organisations through corporate innovation. The book was shortlisted for the Thinkers50 Strategy Award in 2021.
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