When Is Business Acquisition a Good Growth Strategy? ANHB Group and Hatta Honey of Dubai

Abstract

Mr. Al Qasimi chairs ANHB Group, a company centered on honeybee sustainability in the United Arab Emirates (UAE). Faced with the opportunity to acquire an existing honey business that has shown significant losses, he must understand the key risks and benefits of this investment-intensive decision. The firm, Dubai-based Hatta Honey, was facing numerous challenges. The primary concern was that the firm was struggling to produce cost-effective products. Apart from that, there was a lack of qualified and skilled staff in the management and bee-keeping operations, which affected business outcomes. Moreover, the business lacked a brand identity in the local market, effective financial management, standard internal controls, and efficient processes. All of this contributed to a year-on-year net loss of 17% (company internal source). When presented with these details in a feasibility report, Mr. Al Qasimi was faced with a decision: should he go ahead with the acquisition, and if so, how can he reduce risk and transform the company to make it profitable?