Acquisitions

You know how they encourage businesses about sticking to their core strengths. It is also referred to the hedgehog concept from Jim Collins’ Good to Great. So, when I read about Lehman Brother’s acquiring Archstone-Smith Trust and now Morgan Stanley’s recent acquisition of Investa Property Group of Australia, I start to question the hedgehog concept.

Are we seeing some kind of vertical acquisitions? Are banks looking at all the money that an individual spends over a lifetime and if that part of the value chain offers significant profit margins, they want to capture it? Or, are we seeing an attempt at diversification? Are banks getting into the real estate industry? Or, the type of business/industry does not really matter as long as the profit margins justify the transactions. So, then what makes a good acquisition target for a bank? That’s the topic for another time.

On a side note, it would seem that anytime I said I wanted to work in a specific industry was all for naught. I might as well have worked in any industry and probably would have ended up working for a bank.