Word: mergers
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Dates: during 1990-1999
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...merger deal had been under discussion for two months. Finally, all the intricacies had been worked out. The last step in sealing the agreement turned out to be...a moonlight disco-dancing cruise...
...word merger conjures up only thoughts of deals to join corporate giants like Exxon and Mobil, conjure again. What headline writers call "merger madness" is also breaking out among relatively pint-size companies, which seal new relationships in the cafeteria and celebrate with interpersonal mingling that can involve the whole staff. These not-so-big deals sometimes seem to occur in a business world altogether different from the one inhabited by the megabillion-bucks monsters. Witness the just completed merger of Personify and Anubis, two California e-commerce companies...
...time of the merger, the combined revenues of Gresham and Open Microsystems totaled roughly $30 million. In only a year and a half, that has grown to $50 million. For Groves, though, the merger was a success in another sense--as "a way to build a bridge that would eventually get me out of there. My m.o. is to build something quickly" and then move on. He has no intention of emulating Oracle founder and still chief Larry Ellison. Oracle, Groves remarks, "got really big, and that's terrible because you can never escape from...
Mocha's comments point to another difference between little mergers and the monster variety (besides the obvious one of size). Although the conglomerate craze is waning, most big-time mergers still aim at a degree of diversification. But small firms almost always combine with others in the same industry. That, of course, frequently means mergers of direct competitors or potential competitors, like Personify and Anubis. But while trustbusters may try to stop such a merger between two giant competitors or at least attach onerous conditions, they are almost sure to ignore combinations of little competitors. It is difficult to imagine...
...There are almost no short-term cost savings [in a merger] if you do it right," says Fred Zimmerman. He has been on 16 company boards as a small businessman turned professor (of engineering and international management) at the University of St. Thomas in Minnesota. He counsels would-be acquirers to be prepared for an increase in expenditures beyond the price of the acquisition. Says Zimmerman: "You'll want to improve the [acquired] company because it's now your property. So you'll probably want to buy more equipment or expand distribution or develop a new product. These...