There are several factors behind the increase in mergers and acquisitions. Firstly, the accelerated rate of globalisation has left companies desperately seeking overseas acquisitions in order to remain competitive. Deutsche Bank bought its way into the US with its takeover of Bankers Trust, whilst Siemens hopes that its acquisition of Matra, the French defence group, will allow it to gain access to France’s railway business, which is dominated by Alstom, the Anglo-French consortium.
Another factor behind the increase in merger activity is the record performance of stock markets, which has enabled companies to finance major acquisitions on the strength of their inflated share prices. Earlier this year Vodafone, the UK mobile telephone operator, acquired its US counterpart AirTouch by making AirTouch shareholders a cash and stock swap offer worth a total of $62bn. The deal created Vodafone AirTouch, the world’s largest mobile telecoms group with over 29m customers.
The European banking sector is also seeing a trend towards consolidation, a process accelerated by deregulation, over-capacity and the arrival of the single European currency.
New technology is also making it easier for companies to diversify as different industries come to rely on common technologies. Microsoft, for instance, is busily diversifying into cable and mobile telecommunications as wall as WebTV. The US software giant has a $5bn equity stake in AT&T, which recently bought Media One for $57bn. Under the deal, Microsoft will succeed in introducing its recently-launched cable television software into millions of homes in the US and UK.
Not all mergers, however, are the result of global economic trends, political change or technological innovation. BMW’s takeover of the Rover Group injected much needed investment into the struggling UK car manufacturer whilst extending BMW’s product range. And when the UK pharmaceutical firm Zeneca merged with Swedish drug company Astra, the new company started life with strong combined R&D capabilities, further strengthened by the world’s best selling drug Losec in its porfolio of products.
Despite all these potential benefits and their promise of competitive advantage, mergers and acquisitions are not risk-free ventures.
Such alliances are more than just financial agreements; they also involve the coming together of different corporate and, in many cases, national cultures. This can have a destabilising effect on a workforce and may mean projected efficiencies are not delivered. Daimler and Chrysler, for example, face the challenge of integrating two very different corporate and national cultures.
A further destabilising effect is the prospect of redundancies as companies look to reduce their payroll by restructuring duplicated functions such as marketing and administration. Although shareholders are lured by such short-term savings, there is little evidence to show that mergers and acquisitions actually add long-term value to company performance.
- Plummeting: 直线下降的
- Desperately: 拼命地；绝望地；不顾一切地；极度地；猛烈地
- Whilst: 同时；在…时，在…的过程中；虽然，尽管；<古>直到
- Consolidation: 巩固；（企业、诉讼和诉讼人的）合并；加强；联合；充实；变坚固；（股票等）价格平稳期
- Deregulation: 违规；解除管制；放松管制
- come to: 苏醒，恢复知觉；涉及到；被…继承；（形势）成为…，变为…（通常指变糟）；总计为，加起来是；恢复知觉；突然被某人意识到（想起来）
- Recently-launched: 最近推出
- Pharmaceutical: 制药的；配药的；卖药的
- Ventures: （尤指有风险的）企业，商业，投机活动，经营项目
- Destabilising: de-stabilising，使不稳定
- Workforce: 劳动力；劳动大军，劳动人口；全体员工
- Projected: 预计的；投射的
- Prospect: 前景；展望；希望；前途；可能性；设想；风景；成功的机会；（竞赛中的）有望获胜者
- Redundancies: 多余；（因劳动力过剩而造成的）裁员，解雇；累赘
- Duplicated: （尤指不必要时）重复，再做一次；复制；复印；复写
- Lured: 引诱；诱惑；劝诱
原文标题：《The magic of the merger》
封面来源：Stephen Dawson, Unsplash.