A new-product-line acquisition lets an acquirer add an already-built product to offerings sold to its existing customers. It expands the product suite, adds features, protects customer relationships, and can increase revenue per customer. section 31.3.1
The structure creates a practical tradeoff:
- For the acquirer, buying a finished product is faster than building one internally. section 31.3.1
- For the acquired company, tight integration can be positive because the product is important to the acquirer’s strategy. section 31.3.1
- The seller should expect rapid integration of its product and entire company rather than initial independence. section 31.3.1
Typical examples
Google’s acquisition of YouTube and Facebook’s acquisition of Instagram illustrate products added to larger companies’ existing offerings. section 31.3.1
