[totalZero]

M&A often pays off in strange and discontinuous ways that extend beyond the growth of an acquired division. My intuition is that the payoffs tend to catalyze when the company is refactored, people get shuffled around, IP becomes accessible across divisions, research from one group gets synthesized into another, burgeoning market landscapes become less competitive, etc.

Personally I think strategic M&A is a far more intelligent use of cash and credit than share buybacks and dividends.

Intel has arguably made at least a few solid acquisitions. AMD is buying Xilinx a few years after Intel bought Altera, which tells us that the Altera acquisition couldn't have been totally misplaced -- AMD has the benefit of hindsight with which to evaluate its own acquisition. Mobileye seems to be well positioned as conventional automakers are beginning to offer mainstream EVs.

Perhaps the problem is that there are certain higher-order functions (M&A, stock buybacks) that should generally be conducted only when the lower-order functions (core business) are firing on all cylinders. Companies have finite resources, and executives have limited time and energy, that shouldn't be starved away from the core business unless absolutely necessary.