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Is a merger best?
by This email address is being protected from spam bots, you need Javascript enabled to view it on Saturday, 4 July 2009
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Results 1 to 6 of 6
Posted on Friday, 10 July 2009
Article quality very poor
Posted by Andrew Preston at 09:42 UAE time
I am very surprised the editor would allow such a poorly written, uninformative, misguided, and technically incorrect article to be published.
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Posted on Sunday, 5 July 2009
To Jack
Posted by Luis at 18:37 UAE time
Jack, thanks a lot for the reminder. This brings things into context.
It would be great if someone took the effort to build the story, from the IPO until now, with the stock price evolution and who were the bigger winners and losers.
Maybe this is a reasonable "homework" to go with this piece?
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Mergers..!
Posted by Jack at 15:59 UAE time
Just a small point of order on the reported 'merger' between Nakheel and DMCC. DMCC, like Limitless, are already part of the Nakheel behemoth, they were originally 'demergered' to be stand alone specialist entities for specific business models. This move is likely to be an inhouse corporate 'restructuring' exercise of staff and finances than a merger in the true sense.
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I am not even sure this is funny.
Posted by Luis at 15:12 UAE time
I know it has been pointed already but "Mergers are events that most of us witness once in a while" where have you been living man? under a rock? In the floor of the ocean?
Have you heard of a book called "Barbarian at the gates"?
Do you realize that M&A means "Mergers and Acquisitions" and banks used to employ scores of people for this event "that most of us only witness once in a while"?
None of your relatives/friends was ever made redundant after a merger?
This one is also a good one "Mergers seem a good idea for small companies that aren't too successful or when the result of the merger will increase the worth of all companies involved."
I fully agree on the second part... but the first one? why is a better idea than small unsuccessful companies merge any better than big unsuccessful ones doing it. This size-related reasoning totally escapes me.
And the "homework" or should I dare say "due diligence" better be done.
Now going to the core issues, I also share the doubts about the rationale for the mergers. Cynics, a growing race in this land, may point to the similarity between merging two flagging construction companies and merging two underperforming banks as the japanese did with gusto (and my own country seems to be ready to do with the Spanish Savings and Loans). Very seldom you will get a healthy company by merging two sick ones, and more often you will end up with a company too big to fail. Often the solution lies in letting the weakest one die and the stronger ones feed on the carcass. But of course that requires a political courage that is hard to find as the costs (the death of the weakest) are coming early on and the potential benefits will come later... if ever.
So many questions... We just need Omar here to bang us on the head for daring to question the wisdom of these decisions.
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My initial reaction - what the .....!
Posted by Riyas at 11:32 UAE time
"Mergers are events that most of us witness once in a while". Very poorly writtent article, not to mention the shallow research. The most well known instance of a merger gone wrong (at least more well known than the GM case presented in the article) is that of AOL Time Warner, where the write off was close to USD 100 billion.
FYI buying 51% stake in a company is not equal to merger either.
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Posted on Saturday, 4 July 2009
Amusing to read musings of a financial titan
Posted by Geriant at 15:29 UAE time
The comments above make one wonder why this guy is earning a tiny salary as editor of a minicule local mag for brickies when with his clear nouse, towering experience and futurism he could be running Nakheel or Arabtech. Alone.
"Let's just hope that the homework was done, and done well."
You don't say! I hope the leadership of the merger-world is listening.
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