The Spatial Dimension of an Acquisition

The acquisition of a large, diversified retailer by a competitor is described. The case sheds light on the weight of spatial considerations, such as expansion to new markets and penetration of existing ones, relative to other acquisition criteria, such as the compatibility of merchandising and management styles and the price of the target. Non-spatial factors narrowed the search to three corporations with compatible retail mix, while spatial overlap focused the choice further to two targets with equal price but different retail mix and spatial spread. The final choice was influenced by the anticipated resistance which the management of the respective companies would offer to a bid.