Considering an acquisition? Answer six questions about the deal and see how deals like it have ended. Of 78 large acquisitions with a known outcome, 19 were later sold off or written down, and the trouble was not spread evenly.
6 questions to go. Your result appears here.
What the test measures
Three questions the record says matter more than any other: how far the target is from what you run, whether you are buying a capability or buying growth, and whether a contest set the price.
Distance is the risk: half the deals into a business the buyer did not run went wrong, against one in eight next door
Buying a capability worked; buying growth did not
A price set in a contest was more than twice as likely to end badly
What it is not
A forecast. The record covers 88 acquisitions of $1 billion or more, researched from published sources; well-documented deals lean toward the famous ones, both failures and successes. The lessons come from the biggest deals and apply to smaller ones, but read them as what happened to companies before you, not as odds for yours. 24% of the deals with a known outcome ran into trouble.