Outlook: Merger mania starts to run out of steam
Tuesday 10 March 1998
The backdrop to these two episodes is very different. With Glaxo and SmithKline, the story was about personal and cultural incompatibility; it was about different styles of management as much as who was going to run the show. With Reed Elsevier and Wolters Kluwer it was more to do with competition issues than anything else.
Reed was last night blaming Wolters, claiming it made unacceptable demands for a change in the terms of the deal. What really seems to have happened is Wolters began to believe the competition authorities were demanding too high a price in terms of asset disposals to make the deal worthwhile to its own shareholders. Attempting to renegotiate the terms with Reed may have been just a pretext for scuppering the deal.
So yes, these two mergers broke down for entirely different reasons. There is a theme here none the less.
Put at its most basic, the industrial case for consolidation is to build higher market share at lower cost. It wouldn't be wholly fair to depict this process as a cynical attempt to squeeze customers and employees for the benefit of shareholders. There's a bit more too it than than that. But this is certainly a part of it - if only because the commercial pressures on companies are all the other way right now.
Globalisation, rapid advances in information technology, and greatly enhanced competition is destroying margin as never before, creating unprecedented pressure for cost cutting consolidation. Unfortunately, or perhaps happily depending on your point of view, the competition and management issues involved seem to be getting too big to handle.
Malaysia Airlines plane crash exposes alarming flaw in airline security: over one billion flights made last year without stolen-passport check
Kim Jong-un wins 100% of the vote in North Korean elections
Teacher shows sex tape featuring herself to pupils during class by mistake
Malaysia Airlines Flight MH370: Oil slicks in South China Sea ‘not from missing jet’, officials say
Swarm of killer bees sting woman 1,000 times
Britain's top vet sparks controversy with call for ban on slashing animals' throats in 'ritual' slaughters for halal and kosher meat products
If you're horrified by a flame-roasted dog, you should be shocked at a hog roast
Poor 'live like animals' says Boris's privately educated sister after going on 'poverty safari'
Exclusive: Impact of immigrants on British workers ‘negligible’
Vince Cable: Teachers 'know absolutely nothing' about the world of work
Ukraine crisis: Russia pledges to 'retaliate against sanctions' as Ukrainian president says Crimea vote will not be recognised
- 1 International Women's Day 2014: The shocking statistics that show why it is still so important
- 2 Australian man Rod Sommerville reacts to bite from deadly snake by reaching for cold beer
- 3 Teacher shows sex tape featuring herself to pupils during class by mistake
- 4 David Cameron resorts to paying for Facebook fans because not enough people like him
- 5 Steve Irwin’s final words: Cameraman present at death opens up about deadly stingray attack for the first time
iJobs Money & Business
£32000 - £36000 per annum + generous benefits: Pro-Recruitment Group: * TAX * ...
£55000 - £70000 per annum + benefits: Pro-Recruitment Group: In-House Corporat...
£80000 - £100000 per annum + benefits: Pro-Recruitment Group: In-House Opportu...
£30000 - £35000 per annum + generous benefits: Pro-Recruitment Group: Mixed Ta...