The Acquisition Machine. How Hanson turns around non-profitable organizations.

Essay by nabhatiesCollege, UndergraduateA-, January 2008

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Hanson PLC is one of the 10 biggest companies in Britain and its U.S. arm, whereas Hanson Industries is one of America’s sixty largest industrial concerns. Hanson PLC was founded in Yorkshire, England in 1950 and since then has gained a reputation for being one of the biggest and most successful takeover machines in the world. This reputation was built on the knowledge and traits of the founders (Lord James Hanson and Sir Gordon White) which gave the company its competitive advantage. With having taken over many acquisitions both in the U.K and in the U.S, they are faced with the question of what the future holds in terms of its business strategy for them as they are both in the late sixties and looking towards retirement. Also, the fact that the companies had grown so large, it is reaching a maturity state with little attainable growth available for them late in the working lives.

Under White’s leadership, one of the things that have distinguished Hanson PLC from many other acquisition conglomerates is its distinctive acquisition philosophy. This philosophy or strategy of Sir Gordon White appears to be based on a number of consistent factors that are found to underlie most of Hanson’s acquisitions. Hanson’s acquisition strategy deals with such things as Target Characteristics in which Hanson looks for companies that are based in mature, low-technology industries that have a less-than inspiring record but show potential for improving performance. Hanson researches his takeover targets thru a takeover staff that undertakes detailed research into the potential of target companies before any bid is made. Other acquisition strategies include the risk assessment where Sir White will only purchase a company if he thinks that in a worst-case scenario, he will be able to recover the purchase price by breaking the target up...