Everybody Wins with MergersPosted by Bruce Pilgrim Talking to My Cats: 12-04-07
These are always "win-win" situations. Often, the larger company will gain market share by acquiring the smaller company's customer base. The smaller company gets to be part of a larger enterprise with more scale and more resources, allowing it to do things it could only dream of in the old days. The boards of directors and upper management from both companies will invariably reach an agreement that is in the best interest of all stockholders, customers, and employees, based on the highest ethical standards. It would never occur to them to try to enrich themselves. Generally, the two companies will perfectly complement each other, with virtually no overlap – one being the yin to the other's yang. The strengths of one cancel out the weaknesses of the other. And vice versa. Customers love mergers. They know they will get higher quality products, improved services, and lower prices. There will be absolutely no reason for them to look elsewhere for another vendor. All is well and will continue to be well. Employees are usually delighted because they are secure. The newly combined company will undoubtedly provide improved benefits, additional compensation, and better jobs. Worst case scenario: some employees might get the chance to explore new career opportunities. What's not to love? Every now and then, a less well known company will acquire another with a much better "brand" name, and then assume the better known name. This is how Lefty's Phone Company became the "new" AT&T, and how Blue Light Specials changed their name to Sears. Sometimes, in ways that only bankers can explain, one company will somehow manage to acquire a much larger company. I'd actually like to find out how that works, because my company is interested in acquiring Microsoft. We plan to keep the brand, and none need worry about losing their jobs. Except Ballmer. Bruce Pilgrim is the CEO and janitor of Bruce Pilgrim Marketing Communications, LLC. He recently published his first book, Talking to My Cats: A Small Business Journal. Bookmark This
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If you work for a good company – a company that is attractive, with a great sense of humor, and a nice personality – there's an excellent chance your company will be involved in an M&A sooner or later. M&A, boys and girls, stands for "mergers and acquisitions," the process in which two corporations meet, fall in love, get married, and live happily ever after.