Gillette (NYSE: G) is another of the greatest companies of the 20th century that's getting sliced and diced. Just a few years ago, Gillette was considered a sure thing. Then it bought Duracell batteries. (If you listen, you can still hear the sound of tons of alkaline batteries landing in Gillette warehouses.)

Since then, Gillette's been cut from $64 per share to $29, marking a loss of $30 billion in market value. Talk about acquisition risk! Duracell dropped a load of battery inventory on Gillette. And, the cost of the acquisition wasn't cheap; Gillette still carries more than $2.8 billion in debt from the buyout.

When a company you own, large or small, makes a substantial acquisition, study the balance sheet of both companies carefully. Is the buyer getting a stronger or weaker business than its own? Rarely is it smart to buy weaker businesses with fewer opportunities -- even at a discount.

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