The Morning After: Making Corporate Mergers Work After the Deal is Sealed
Editorial Reviews
From The Industry Standard
Mergers are hard. Strategies have to be meshed, synergies synthesized, egos massaged and apprehensions assuaged. And even if all goes well internally, regulators can still shoot down the whole operation before it ever gets rolling. It comes as no surprise then that well over half of all proposed mergers fail to realize all of the promises made in the first blush of impending union.
As in the world of human mergers, though, low odds of success have not prevented CEOs from gyrating ever more wildly in the global capitalist mating dance. In an effort to guide awkward executives through corporate connubiality now comes The Morning After: Making Corporate Mergers Work After the Deal Is Sealed, by husband-and-wife consulting team Stephen Wall and Shannon Rye Wall.
Since the authors cite executive sources at major merger factories such as Pfizer, Verizon and Cisco, which has acquired more than 55 companies over the last seven years, readers would be justified in hoping for some major merger insights. Unfortunately, the authors instead provide an Arthur Murray-level introduction to the basic steps in the mating dance. They rely heavily on newspaper and magazine quotes and provide little original research or critical analysis, squandering the opportunity to lay out in a satisfying way what can go wrong with ubermergers such as the AOL-Time Warner deal or DaimlerChrysler - or even better, how to prevent things from going wrong.
The total value of mergers and acquisitions worldwide has risen from $1.58 trillion in 1997 to $3.44 trillion last year, with no end in sight (although there has been somewhat of a dip in dot-com action this quarter). The Walls identify three components driving this growth: "superheated" competition, "supersmart" customers and "superfast" change. Leave out the super, however, and there's nothing new to their "super equation." Indeed, one could argue that business consists of little else.
Equally unsurprising is the Walls' counsel that people at all levels should be involved in a merger as early as possible, from the senior team (brought together through an "integration team" and later a leadership council) all the way down to the guys in the mailroom (invited to workshops that explain the new vision and how to get there).
More disturbing in this increasingly international business environment is that the authors treat international mergers as an afterthought, with advice that sounds as if it's straight out of one of those Dummies books. Developing "cross-cultural skills" and learning the language, as they suggest, is a lovely idea. But that certainly wouldn't have been enough to prepare Chrysler's team for the subtle aggressiveness of their partners over in Stuttgart.
To their credit, the Walls do a nice job in deconstructing the jargon surrounding mergers. Their checklist can serve as the acid test for almost every recent merger story. A few samples: There is no such thing as a "merger of equals"; neither should anybody feel too comfortable upon hearing a CEO brag about simply "buying" the other guys. If somebody tells you it's a "natural fit," they likely are in for a big surprise. And, of course, steer clear of those who assure you that "nothing will change."
Ultimately, though, the Walls fail to connect the dots. "In the urgency and rush of a merger, there is a strange tendency to throw out much of what has been learned about effective motivation and management over the last 40-plus years," they write - and leave it at that.
The Morning After: Making Corporate Mergers Work After the Deal is Sealed,Stephen J. Wall,Shannon Rye Wall,Sharon Rye Wall,Perseus Books Group,0738205230,Business & Economics,Business / Economics / Finance,Business/Economics,Economics - General,Mergers & Acquisitions,Business,Management
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