Acquisition indigestion

Acquisition indigestion,

Definition of Acquisition indigestion:

  1. Acquisition indigestion describes a situation where an acquired firm isn't processed and absorbed properly by an acquiring firm. It is a take-off of the term indigestion. Indigestion occurs when you eat too much or when you consume food that doesn't agree with your stomach. Essentially, you aren't able to adequately process and make the most out of the food you have consumed. The same outcome relates to mergers and acquisitions that have gone sour, as companies may get indigestion when acquiring too many targets or purchasing firms that don't integrate well.

  2. Acquisition indigestion is a slang term describing an acquisition or merger in which the companies involved have trouble integrating with one another. This could mean they have trouble deciding how their departments will integrate, how they will handle redundancies, or where budgeted funds will be directed. Acquisition indigestion may also describe a situation in which the purchasing company has difficulty making the most of a takeover. This happens often in acquisitions where the acquirer is after market share growth but doesn't have the necessary infrastructure to successfully absorb and manage an acquired firm.

  3. Used to describe the financial and legal ramifications of a large scale acquisition, in which redundant positions and technologies need to be eliminated, shareholders must be pacified, business segments must be integrated and margins must be readjusted before cost-saving synergies can occur.

Meaning of Acquisition indigestion & Acquisition indigestion Definition