As the post-crisis thoughts of executives turn to mergers, acquisitions, and disposals, the familiar idea of “best owner” takes on renewed urgency. Discerning readers will be well aware that best owners are those companies whose distinctive characteristics enable them to create more value in a given business than other potential owners could. But the pace of rapid recovery in equity market valuations may be causing some executives to worry too much about being preempted by better-prepared competitors and too little about acquiring businesses where they themselves would hold a distinct advantage.

The risk is considerable. Reactivating deals that were put on hold may be unwise in some industries where fundamental changes during the crisis have weakened the competitive position of deal targets or hurt the structural attractiveness of their markets. Companies may also discover that they have lost competitive advantage in businesses they already own. Moreover, boards and management teams that assess the fundamental attractiveness of their potential acquisitions and disposals solely by growth and returns increase the likelihood that they will enrich only the sellers of the businesses they buy—or the buyers of the businesses they sell.