When firms are desperate to grow and to please shareholders who demand growth, they take desperate measures such as overpaying for acquisitions and put themselves on the road to long-term hardship
When Quaker Oats bought drinks company Snapple in 1994 it was basing its big bet on the successful management of Gatorade, which it bought in 1983. Some analysts estimated that the US$1.7 billion it paid was about US$1 billion too much. Problems with merging corporate cultures and challenges in the new age drinks market led to Quaker selling Snapple just 27 months later for only US$300 million.
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