(Thompson J. 2001).
Hanson argued in the early 1990s that its future strategy would involve further acquisitions of suitable companies that could be bolted on to existing core activities. The managing directors of the individual core businesses would be encouraged to follow the lead of Hanson head office, and seek out and cost potential buys. It means that it is necessary to implement acquisitions, but it is also essential to consider whether the acquisitions are suit for such activities or not. In fact, Hanson have got lots of profit from the acquisitions, so Hanson will search new strategies on it. Opportunistic acquisitions are still considered. In 1992, for example, Hanson bid for UK foods company Rank Hovis McDougall. When challenged about how this fitted in to the newly declared strategy. Hanson commented that buying RHM was still consistent with the stated objective of maximizing the value of the business for its shareholders.
Of course, there are also some failures on acquisitions. In 1985 that company's shareholders rejected Hanson's £147 million bid for Powerll Duffryn, and at this time such an occurrence was unusual. However, the situation began to change in 1990. In 1990 Hanson expressed an interest in buying PowerGen from the UK government. PowerGen was the smaller of the two electricity-generating companies to be created when the industry was privatised. Contrary to previous Hanson practice, electricity generating involves high technology supported by research and development. In addition, it was speculated that Hanson would have to adopt a much more hands-on style of management with PowerGen. Had it bought the company, PowerGen would have constituted the largest business in the Hanson portfolio, but Hanson withdrew. The key reason why acquisitions fail is that they do not generate the synergy that was anticipated or at least hoped for. This is particularly true for conglomerate rather than concentric diversification.
