AstraZeneca, please say hello to Pfizer

There is no such thing in the business world as a merger of equals. One party always has the upper hand.

 

Share

I was sitting outside a restaurant in central London the other day, and two men in dark suits were saying goodbye to each other on the pavement. “Absolutely,” said one. “Let me know how it goes,” said the other. “I’ll be back in touch,” came the reply. They’d clearly just had a business lunch, with lashings of thinking outside the box and 360 solutions, but other than that their exchange gave no clue as to the hierarchy of the two men. When it comes to all manner of business dealings, someone’s a buyer and someone’s a seller, but I couldn’t tell who was who.

This is, of course, a rather crude interpretation of human transactions – and I wouldn’t advocate applying this rule to personal relationships – but there’s a truth at the heart of it. There is no such thing in the business world as a merger of equals. Compromise and negotiation may be the spirit in which matters are conducted, but in the end one party has the upper hand. There’s a seller and a buyer. One man’s merger is another man’s takeover.

Britain, poster child of economic recovery, and, seemingly, a tax haven second only to the Cayman Islands, is the backdrop to an impressive amount of big business activity at the moment. AstraZeneca, please say hello to Pfizer. Dixons, meet Carphone Warehouse.

The Dixons deal is particularly interesting because both parties are determinedly calling it a merger, saying that the new business will operate under the name Dixons Carphone (why not Carphone Dixons, I wonder?) and the current chief executive of Dixons, Sebastian James, will be the boss of the new company. His deputy will be Carphone Warehouse’s current CEO, so on an operating level at least, it’s clear from the division of spoils where the power lies. Sir Charles Dunstone, the co-founder and chairman of Carphone Warehouse, will chair the new board, and investors have already declared they are happy with the strategic logic behind the deal. So far, so gentlemanly.

Everyone, we are led to believe, is a winner, and the fact that Sir Charles and Mr James know each other socially is clearly an important factor in driving this deal towards the winner’s enclosure. According to The Economist, “above all, personal chemistry matters every bit as much in mergers as it does in marriage. It matters most at the top. No company can have two bosses for long. So one boss must accept a less important role with good grace.”

So even – or maybe especially – in a world where clinical decisions on matters of facts and figures have to be made, it boils down to flesh and blood. Take the recent failed ‘merger’ between the two media giants, Omnicom and Publicis, who were hoping to create a mega-company that would bestride the globe. They were driven by financial and strategic imperatives, but, among other issues, the cultural differences between a French company and an American one proved to be a bridge too far. On one side of the negotiating table was a man called Jean-Michel and on the other was a man called Randy. Who thought that would work? It’s worth remembering that, in a climate of multi-billion takeovers, it is still all about people. About buyers and sellers, in fact.

React Now

  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Recruitment Genius: Client IT Account Manager

£25000 - £30000 per annum: Recruitment Genius: A Client IT Account Manager is ...

Ashdown Group: Management Accountant / Analyst (CIMA finalist/newly qualified)

£32000 - £38000 per annum + Benefits: Ashdown Group: Management Accountant / F...

Recruitment Genius: Software Developer - .NET

£27000 - £32000 per annum: Recruitment Genius: This leading provider of a mark...

Recruitment Genius: Help Desk Specialist

£25000 - £35000 per annum: Recruitment Genius: This company provides Reliabili...

Day In a Page

Read Next
 

Daily catch-up: the endless and beginningless election campaign goes up and down

John Rentoul
Zoe Sugg, aka Zoella, with her boyfriend, fellow vlogger Alfie Deyes  

What the advertising world can learn from Zoella's gang

Danny Rogers
No postcode? No vote

Floating voters

How living on a houseboat meant I didn't officially 'exist'
Louis Theroux's affable Englishman routine begins to wear thin

By Reason of Insanity

Louis Theroux's affable Englishman routine begins to wear thin
Power dressing is back – but no shoulderpads!

Power dressing is back

But banish all thoughts of Eighties shoulderpads
Spanish stone-age cave paintings 'under threat' after being re-opened to the public

Spanish stone-age cave paintings in Altamira 'under threat'

Caves were re-opened to the public
'I was the bookies’ favourite to be first to leave the Cabinet'

Vince Cable interview

'I was the bookies’ favourite to be first to leave the Cabinet'
Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat
Saudi Arabia's airstrikes in Yemen are fuelling the Gulf's fire

Saudi airstrikes are fuelling the Gulf's fire

Arab intervention in Yemen risks entrenching Sunni-Shia divide and handing a victory to Isis, says Patrick Cockburn
Zayn Malik's departure from One Direction shows the perils of fame in the age of social media

The only direction Zayn could go

We wince at the anguish of One Direction's fans, but Malik's departure shows the perils of fame in the age of social media
Young Magician of the Year 2015: Meet the schoolgirl from Newcastle who has her heart set on being the competition's first female winner

Spells like teen spirit

A 16-year-old from Newcastle has set her heart on being the first female to win Young Magician of the Year. Jonathan Owen meets her
Jonathan Anderson: If fashion is a cycle, this young man knows just how to ride it

If fashion is a cycle, this young man knows just how to ride it

British designer Jonathan Anderson is putting his stamp on venerable house Loewe
Number plates scheme could provide a licence to offend in the land of the free

Licence to offend in the land of the free

Cash-strapped states have hit on a way of making money out of drivers that may be in collision with the First Amendment, says Rupert Cornwell
From farm to fork: Meet the Cornish fishermen, vegetable-growers and butchers causing a stir in London's top restaurants

From farm to fork in Cornwall

One man is bringing together Cornwall's most accomplished growers, fishermen and butchers with London's best chefs to put the finest, freshest produce on the plates of some of the country’s best restaurants
Robert Parker interview: The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes

Robert Parker interview

The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes
Don't believe the stereotype - or should you?

Don't believe the stereotype - or should you?

We exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor