Página 25 - Coordinación de Servicios de Información

MEGAFUSIONS
• "During the 20th century there have been five great waves of
mergers. However, these giant mergers have had an infamous record
of failure. Now, the greatest merger manía in history is unraveling
before our eyes. If the historical trends hold true, roughly two thirds
of these newly merged giants will disappoint on their own terms,
which is to say they willlose value on the stock market. The ines–
capable conclusion: the world economy is now littered with sorne
US$2 trillion in failed or failing corporate giants, and tha!' s from
the year 2000 alone.
The buyer's bet is that the merged company can cut costs or boost
revenues by more than enough to justify the premium. It all sounds
so simple: just combine computer systems, merge a few depart–
ments, use sheer size to force down the price of supplies, and the
merged giant should be more profitable than its parts. Alas, it fails
to work out that way more often than not. As an economist from
Baruch College pointed out: 'the theoretical argument [for merg–
ers) is flawless. But in its implementation things go wrong.'
We can summarize the 5 merger waves as follows.
1) The robber barons at the turn of ilie 20th century created new
manufacturing monopolies by going public on the fledgling New
York Stock Exchange and using their shares to buy up smaller family
companíes;
2) The next merger wave rose with the stock market of the the
19205 and spread from manufacturing to banking, retailing, food
and chemicals. Out of this tumult emerged both the first modern
corporations like Du-Pont and General Electric, with a professional
class of managers and a new industry of consultants;
3) The next wave didn't arrive until ilie stock-market boom of the
19605. This was a time of unbridled faith in the 'science' of man–
agement, which advised corporate chieftains to buy a variety of
unrelated businesses to spread risk. AH this would help create con–
glomerates of bewildering diversity, and in fact, one of these merg–
ers carne to be known as Meatball, Golf ball & Goof Ball as it dealt
English far Economists 23