Bridgestone made different choices 28 years ago with its Firestone deal. Initially, the two companies announced that Bridgestone would buy 75 percent of Firestone's tire operation to form a joint venture.
But a surprise bid for the whole company by Italian tire maker Pirelli S.p.A. led Bridgestone's then-President Akira Yeiri to take bolder action.
Mr. Yeiri deemed the acquisition key to Bridgestone's expansion plans. Acting on a rumor that Pirelli might raise its offer from $58 to $75 per share, Yeiri decided on $80 per share, Businessweek reported in 1991.
It bid for all of Firestone, ignoring warnings by some top executives that the buyout would drain Bridgestone of too much talent and money.
Bridgestone soon learned many of the plants it had acquired were in worse condition than anticipated. After the purchase, it invested $1.5 billion over three years in Firestone. The Firestone unit weighed on the parent, with earnings dropping 76 percent in 1989 and 53 percent the next year even as revenue rose.
Mr. Tsuya, who joined Bridgestone in 1976, was a junior member on the project team that worked on the Firestone acquisition. While the Firestone takeover helped Bridgestone expand, Mr. Tsuya said if he could do it all over again, he wouldn't have bumped up the price as much in one shot, and instead would have raised the bid little by little.
“It was like rushing into a marriage with too much passion,” he said. “Although I think the strategy to take over Firestone was right, we paid very expensive costs after finding out the unexpected negative things after the marriage.”
Bridgestone plans to increase the number of dealers in some U.S. states by either investing in or buying small dealer groups, Mr. Tsuya said. It may also consider acquiring some of Pep Boys' business if they're up for sale again, he said.
Top management should never be too passionate about mergers and acquisitions, Mr. Tsuya said, likening them to marriage. “Without passion it won't work, but with too much passion, you may end up chasing too high and offering too much. You need to have some coolness.”