Company Merger Quotes

If you want to master the art of the sentence, you must first accept a somewhat unpleasant truth--something a lot of writers would rather deny: The Reader is king. You are his servant. You serve the Reader information. You serve the Reader entertainment. You serve the Reader details of your company's recent merger or details of your experiences in drug rehab. In each case, as a writer you're working for the man (or the woman). Only by knowing your place can you do your job well.

So, you work with Marcy?” Wayne earned points for what appeared to be sincere interest. “Yes. She’s in public accounting and I’m in corporate, but we both work for the same company.” Wayne grinned. “Me, I’m in murders and executions.” “Wayne!” Marcy rolled her eyes. “He means—” “Mergers and acquisitions. I got it.

WHO OWNS THE MEDIA? Most Americans have very little understanding of the degree to which media ownership in America—what we see, hear, and read—is concentrated in the hands of a few giant corporations. In fact, I suspect that when people look at the hundreds of channels they receive on their cable system, or the many hundreds of magazines they can choose from in a good bookstore, they assume that there is a wide diversity of ownership. Unfortunately, that’s not the case. In 1983 the largest fifty corporations controlled 90 percent of the media. That’s a high level of concentration. Today, as a result of massive mergers and takeovers, six corporations control 90 percent of what we see, hear, and read. This is outrageous, and a real threat to our democracy. Those six corporations are Comcast, News Corp, Disney, Viacom, Time Warner, and CBS. In 2010, the total revenue of these six corporations was $275 billion. In a recent article in Forbes magazine discussing media ownership, the headline appropriately read: “These 15 Billionaires Own America’s News Media Companies.” Exploding technology is transforming the media world, and mergers and takeovers are changing the nature of ownership. Freepress.net is one of the best media watchdog organizations in the country, and has been opposed to the kind of media consolidation that we have seen in recent years. It has put together a very powerful description of what media concentration means.

Companies should consider merger and acquisition (M&A) opportunities carefully because these strategic moves can have a significant impact on their operations and financial health. Thorough evaluation helps mitigate risks, ensure alignment with business objectives, and maximize the potential benefits, ultimately leading to successful integration and growth.

Nortel—another troubled networking company that suffered operating problems as a result of botched mergers.

They agreed to a merger in which X.com would get 55 percent of the combined company, but Musk almost ruined things soon after by telling Levchin he was getting a steal.

The government regulates them, or chooses not to, approves or blocks their mergers and acquisitions, and sets their tax policies (often turning a blind eye to the billions parked in offshore tax havens). This is why tech companies, like the rest of corporate America, inundate Washington with lobbyists and quietly pour hundreds of millions of dollars in contributions into the political system. Now they’re gaining the wherewithal to fine-tune our political behavior—and with it the shape of American government—just by tweaking their algorithms.

Leaders of large businesses sometimes make huge bets in expensive mergers and acquisitions, acting on the mistaken belief that they can manage the assets of another company better than its current owners do.

In 1998, Google cofounders Sergey Brin and Larry Page approached Yahoo! and suggested a merger. Yahoo! could have snapped up the company for a handful of stock, but instead they suggested that the young Googlers keep working on their little school project and come back when they had grown up. Within 5 years, Google had an estimated market capitalization of $20 billion. At the time of this writing, Forbes reported Google’s market capitalization at $268.45 billion.

Using Hollerith’s tabulators, the 1890 census was completed in one year rather than eight. It was the first major use of electrical circuits to process information, and the company that Hollerith founded became in 1924, after a series of mergers and acquisitions, the International Business Machines Corporation, or IBM.

The economists Ulrike Malmendier and Geoffrey Tate identified optimistic CEOs by the amount of company stock that they owned personally and observed that highly optimistic leaders took excessive risks. They assumed debt rather than issue equity and were more likely than others to “overpay for target companies and undertake value-destroying mergers.” Remarkably, the stock of the acquiring company suffered substantially more in mergers if the CEO was overly optimistic by the authors’ measure. The stock market is apparently able to identify overconfident CEOs. This

The notion of “economies of scale”—that companies save money when they become large, hence more efficient—is often, apparently behind company expansions and mergers. It is prevalent in the collective consciousness without evidence for it; in fact, the evidence would suggest the opposite. Yet, for obvious reasons, people keep doing these mergers—they are not good for companies, they are good for Wall Street bonuses; a company getting larger is good for the CEO. Well, I realized that as they become larger, companies appear to be more “efficient,” but they are also much more vulnerable to outside contingencies, those contingencies commonly known as “Black Swans” after a book of that name.

The thing many people don’t realize about corporate lawyers is that they are nothing like what you see on TV shows. Sherry, Aldridge, and I will never step foot in a courtroom. We’ll never argue a case. We do deals; we’re not litigators. We prepare documents and review every piece of paperwork for a merger or an acquisition. Or to take a company public. On Suits, Harvey does both paperwork and crushes it in court. In reality, the lawyers at our firm who argue cases don’t have a clue what we do in these conference rooms. Most of them haven’t prepared a document in a decade. People think our form of corporate law is the less ambitious of the two, and while in many ways it’s less glamorous—no closing arguments, no media interviews—nothing compares to the power of the paper. At the end of the day, law comes down to what is written, and we do the writing. I love the order of deal making, the clarity of language—how there is little room for interpretation and none for error. I love the black-and-white terms. I love that in the final stages of closing a deal—particularly those of the magnitude Wachtell takes on—seemingly insurmountable obstacles arise. Apocalyptic scenarios, disagreements, and details that threaten to topple it all. It seems impossible we’ll ever get both parties on the same page, but somehow we do. Somehow, contracts get agreed upon and signed. Somehow, deals get done. And when it finally happens, it’s exhilarating. Better than any day in court. It’s written. Binding. Anyone can bend a judge’s or jury’s will with bravado, but to do it on paper—in black and white—that takes a particular kind of artistry. It’s truth in poetry. I

The courtship continued through January 2000, causing Musk to postpone his honeymoon with Justine. Michael Moritz, X.com’s primary investor, arranged a meeting of the two camps in his Sand Hill Road office. Thiel got a ride with Musk in his McLaren. “So, what can this car do?” Thiel asked. “Watch this,” Musk replied, pulling into the fast lane and flooring the accelerator. The rear axle broke and the car spun around, hit an embankment, and flew in the air like a flying saucer. Parts of the body shredded. Thiel, a practicing libertarian, was not wearing a seatbelt, but he emerged unscathed. He was able to hitch a ride up to the Sequoia offices. Musk, also unhurt, stayed behind for a half-hour to have his car towed away, then joined the meeting without telling Harris what had happened. Later, Musk was able to laugh and say, “At least it showed Peter I was unafraid of risks.” Says Thiel, “Yeah, I realized he was a bit crazy.” Musk remained resistant to a merger. Even though both companies had about 200,000 customers signed up to make electronic payments on eBay, he believed that X.com was a more valuable company because it offered a broader array of banking services.

Summers also claimed that technology was reducing the demand for capital. Digital businesses, such as Facebook and Google, had established dominant global franchises with relatively little invested capital and small workforces. In his book The Zero Marginal Cost Society (2014), the social theorist Jeremy Rifkin heralded the passing of traditional capitalism.16 If the Old Economy was marked by scarcity and declining marginal returns, Rikfin argued that the New Economy was characterized by zero marginal costs, increasing returns to scale and capital-lite ‘sharing’ apps (such as Uber, Lyft, Airbnb, etc.). The demand for capital and interest rates, he said, were set to fall in this ‘economy of abundance’. There was some evidence to support Rifkin’s claims. The balance sheets of US companies showed they were using fewer fixed assets (factories, plant, equipment, etc.) and reporting more ‘intangibles’ – namely, assets derived from patents, intellectual property and merger premiums. In much of the rest of the world, however, the demand for old-fashioned capital remained as strong as ever. After the turn of the century, the developing world exhibited a voracious appetite for industrial commodities that required massive mining investment. China embarked on what was probably the greatest investment boom in history. Before and after 2008, global energy consumption rose steadily. The world’s total investment (relative to GDP) remained in line with its historical average.17 Rifkin’s ‘economy of abundance’ remained a tantalizing speculation.

The power of the big fish in general to regroup is hardly restricted to banking. When Standard Oil was broken up in 1911, the immediate effect was to replace a national monopoly with a number of regional monopolies controlled by many of the same Wall Street interests. Ultimately, the regional monopolies regrouped: In 1999 Exxon (formerly Standard Oil Company of New Jersey) and Mobil (formerly Standard Oil Company of New York) reconvened in one of the largest mergers in US history. In 1961 Kyso (formerly Standard Oil of Kentucky) was purchased by Chevron (formerly Standard Oil of California); and in the 1960s and 1970s Sohio (formerly Standard Oil of Ohio) was bought by British Petroleum (BP), which then, in 1998, merged with Amoco (formerly Standard Oil of Indiana). The tale of AT&T is similar. As the result of an antitrust settlement with the government, on January 1, 1984, AT&T spun off its local operations so as to create seven so-called Baby Bells. But the Baby Bells quickly began to merge and regroup. By 2006 four of the Baby Bells were reunited with their parent company AT&T, and two others (Bell Atlantic and NYNEX) merged to form Verizon. So the hope that you can make a banking breakup stick (even if it were to be achieved) flies in the face of some pretty daunting experience. Also, note carefully a major political fact: The time when traditional reformers had enough power to make tough banking regulation really work was the time when progressive politics still had the powerful institutional backing of strong labor unions. But as we have seen, that time is long ago and far away.

Finally, the legitimization of the corporate holding company [1890] established a business structure that lessened the threat of competition by allowing for the elimination of competitors. The merger movement followed and horizontal combinations of productive capability reorganized industry into large blocks of corporate power.

His order cited "credible evidence" that a takeover "threatens to impair the national security of the US".Qualcomm was already trying to fend off Broadcom's bid.The deal would have created the world's third-largest chipmaker behind Intel and Samsung.It would also have been the biggest takeover the technology koo50 sector had ever seen.The presidential order said: "The proposed takeover of Qualcomm by the Purchaser (Broadcom) is prohibited. and any substantially equivalent merger. acquisition. or takeover. whether effected directly or indirectly. is also prohibited."Crown jewelSome analysts said President Trump's decision was more about competitiveness and winning the race for 5G technology. than security concerns.The sector is in a race to develop chips for the latest 5G wireless technology. and Qualcomm was considered by Broadcom a significant asset in its bid to gain market share.Image captionQualcomm has already showcased 1Gbps mobile internet speeds using a 5G chip"Given the current political climate in the US and other regions around the world. everyone is taking a more conservative view on mergers and acquisitions and protecting their own domains." IDC's Mario Morales. vice president of enabling technologies and semiconductors told the BBC."We are all at the start of a race. and you have 5G as a crown jewel that everyone wants to participate in - and every region is racing towards that." he said."We don't want to hinder someone like Qualcomm so that they can't provide the technology to the vendors that are competing within that space."US investigates Broadcom's Qualcomm bidQualcomm rejects Broadcom takeover bidHuawei's US smartphone deal collapsesSingapore-based Broadcom had been pursuing San Diego-based Qualcomm for about four months.Last week however. Broadcom's hostile takeover bid was put under investigation by the Committee on Foreign Investment in the US. a multi-agency led by the US Treasury Department.The US company had rejected approaches from its rival on the grounds that the offer undervalued the business. and also that any takeover would face antitrust hurdles.Earlier this year. Chinese telecoms giant Huawei said it had not been able to strike a deal to sell its new smartphone via a US carrier. widely believed to be AT&T.The US also recently blocked the $1.2bn sale of money transfer firm Moneygram to China's Ant Financial. the digital payments arm of Alibaba.

Publicly traded companies die through acquisitions, mergers, and bankruptcies at the same rate regardless of how well established they are or what they actually do. The

She reaches across the table to put a soft hand on mine, halting my rambling. “I understand, hon.” I sigh out the words, “Thank you.” “But as much as I understand what’s going on, Logan does not. Do you want him to?” “Very much so. I was wondering if you could help me?” I straighten my back like I’m about to discuss a business agreement, a merger of Guy’s Mom Inc. and The Potential Heartbreaker Company. “What do you need?” I get the feeling she understands the seriousness of the situation, too, because she steeples her fingers together and props her chin on them. “Do you have copies of the books for LARP of Ages? 

Peter Drucker once observed that the drive for mergers and acquisitions comes less from sound reasoning and more from the fact that doing deals is a much more exciting way to spend your day than doing actual work.

Nazarbayev had learned that Westerners could be just as adept as he was in turning money into power and power back into money. Some, like Dick Evans and Jonathan Aitken, went about it from positions at the top of business and government. Others had to wait until they had left office to monetise their access and influence. They had to get theirs from what they called ‘consultancy’. Blair was said to have made $1 million from Ivan Glasenberg’s Glencore for three hours spent talking the Qatari prime minister out of blocking its merger with a mining company. JP Morgan, the Wall Street bank that had won the financial crisis, retained him too, as did a Swiss insurance company, the government of Kuwait and Abu Dhabi’s investment fund. Some days he was a business consultant, others a philanthropist, or a governance guru, or a peacemaker. His money sat in a web of companies that almost rivalled the complexity and opacity Nazarbayev’s Swiss bankers had devised. By one estimate, less than a decade after he resigned as prime minister, his fortune stood at $90 million.

Companies only have to be “big enough,” which rarely means they have to dominate. Often “big enough” is just 10 percent of the market. Yet companies under the influence of winner-takes-all thinking tend to pursue illusory scale advantages. In doing so, they are likely to damage their own performance by cutting price to gain volume, by overextending themselves to serve all market segments, and by pursuing overpriced mergers and acquisitions.

comparison companies frequently tried to jump right to breakthrough via an acquisition or merger. It never worked. Often with their core business under siege, the comparison companies would dive into a big acquisition as a way to increase growth, diversify away their troubles, or make a CEO look good. Yet they never addressed the fundamental question: “What can we do better than any other company in the world, that fits our economic denominator and that we have passion for?” They never learned the simple truth that, while you can buy your way to growth, you absolutely cannot buy your way to greatness. Two big mediocrities joined together never make one great company.

The longer one owns the shares, however, the more important the firm’s underlying economics will be to performance results. Long-term investors therefore seek answers with shelf life. What is relevant today may need to be relevant in ten years’ time if the investor is to continue owning the shares. Information with a long shelf life is far more valuable than advance knowledge of next quarter’s earnings. We seek insights consistent with our holding period. These principally relate to capital allocation, which can be gleaned from examining the company’s advertising, marketing, research and development spending, capital expenditures, debt levels, share repurchase/ issuance, mergers and acquisitions and so forth.

Koch appeared to have structured the deal in a way that protected it from the bankers’ claims. Koch used debt that was called “non-recourse” debt, meaning that lenders could not collect the debt from Koch Industries itself—they had no recourse against the parent company. They could only collect debt against the assets of Purina Mills. But there was a way around this clause. It was called “piercing the corporate veil.” Piercing the corporate veil is one of those arcane strategies known only to a small subset of deal makers and lawyers whose careers took off during the merger boom of the 1980s and 1990s. A banker can pierce the veil by showing that nonrecourse debt was actually a sham used by a borrower to escape liability. For nonrecourse debt to be justified, the parent company needed to be truly independent from the entity borrowing the money.

The Kawasaki merger represented an inconvenient truth: Manufacturing in America was a tough business in the post-globalization world. If companies like Armco were going to survive, they would have to retool. Kawasaki gave Armco a chance, and Middletown’s flagship company probably would not have survived without it.

In his 1961 letter to partners, Buffett laid out three broad categories of investments: generals, workouts, and controls. Generals were undervalued securities where Buffett had no say in corporate policies, nor a timetable for when the stock might reflect its intrinsic value. Buffett pointed out that the generals would behave like the Dow in the short term but outperform the index over the long term. Buffett expected to have five or six positions in this category that were 5% to 10% of total assets each, with smaller positions in another ten to fifteen. Later on, in his 1964 letter, Buffett would break generals into two categories: private owner basis and relatively undervalued. Private owner generals were generally cheap stocks with no immediate catalyst, while relatively undervalued securities were cheap compared to those of a similar quality. Relatively undervalued securities were generally larger companies where Buffett did not think a private owner valuation was relevant.173 Workouts were securities whose performance depended on corporate actions, such as mergers, liquidations, reorganizations, and spin-offs. Buffett expected to have ten to fifteen of these in the portfolio and thought this category would be a reasonably stable source of earnings for the fund, outperforming the Dow when the market had a bad year and underperforming in a strong year. He anticipated these investments would earn him 10% to 20%, excluding any leverage. Buffett would take on debt, up to 25% of the partnership’s net worth, to fund this category. While he didn’t disclose his allocation every year, he put around 15% of the partnership in workouts in 1966 but increased that to a quarter of the portfolio in 1967 and 1968, when he was having trouble finding bargains.174 The final category was controls, where the partnership took a significant position to change corporate policy. Buffett said these investments might take several years to play out and would, like workouts, have minimal correlation to the Dow’s gyrations. Buffett pointed out that generals could become controls if the stock price remained depressed.

Cisco figured out that mergers between similar-sized companies rarely work, as there are frequently struggles about which team will control the combined entity (think Daimler-Chrysler or Dean Witter–Morgan Stanley). Cisco’s leaders also determined that mergers work best when companies are geographically proximate, making integration and collaboration much easier (think Synoptics and Wellfleet Communication, which were not only about equal in size, but 2,500 miles apart), and they also uncovered the importance of organizational cultural

Labor and employment firm Fisher & Phillips LLP opened a Seattle office by poaching partner Davis Bae from labor and employment competitor Jackson Lewis PC. Mr. Bea, an immigration specialist, will lead the office, which also includes new partners Nick Beermann and Catharine Morisset and one other lawyer. Fisher & Phillips has 31 offices around the country. Sara Randazzo LAW Cadwalader Hires New Partner as It Looks to Represent Activist Investors By Liz Hoffman and David Benoit | 698 words One of America’s oldest corporate law firms is diving into the business of representing activist investors, betting that these agitators are going mainstream—and offer a lucrative business opportunity for advisers. Cadwalader, Wickersham & Taft LLP has hired a new partner, Richard Brand, whose biggest clients include William Ackman’s Pershing Square Capital Management LP, among other activist investors. Mr. Brand, 35 years old, advised Pershing Square on its campaign at Allergan Inc. last year and a board coup at Canadian Pacific Railway Ltd. in 2012. He has also defended companies against activists and has worked on mergers-and-acquisitions deals. His hiring, from Kirkland & Ellis LLP, is a notable step by a major law firm to commit to representing activists, and to do so while still aiming to retain corporate clients. Founded in 1792, Cadwalader for decades has catered to big companies and banks, but going forward will also seek out work from hedge funds including Pershing Square and Sachem Head Capital Management LP, a Pershing Square spinout and another client of Mr. Brand’s. To date, few major law firms or Wall Street banks have tried to represent both corporations and activist investors, who generally take positions in companies and push for changes to drive up share prices. Most big law firms instead cater exclusively to companies, worried that lining up with activists will offend or scare off executives or create conflicts that could jeopardize future assignments. Some are dabbling in both camps. Paul, Weiss, Rifkind, Wharton & Garrison LLP, for example, represented Trian Fund Management LP in its recent proxy fight at DuPont Co. and also is steering Time Warner Cable Inc.’s pending sale to Charter Communications Inc. Willkie Farr & Gallagher LLP and Gibson, Dunn & Crutcher LLP have done work for activist firm Third Point LLC. But most firms are more monogamous. Those on one end, most vocally Wachtell, Lipton, Rosen & Katz, defend management, while a small band including Schulte Roth & Zabel LLP and Olshan Frome Wolosky LLP primarily represent activists. In embracing activist work, Cadwalader thinks it can serve both groups better, said Christopher Cox, chairman of the firm’s corporate group. “Traditional M&A and activism are becoming increasingly intertwined,” Mr. Cox said in an interview. “To be able to bring that perspective to the boardroom is a huge advantage. And when a threat does emerge, who’s better to defend a company than someone who’s seen it from the other side?” Mr. Cox said Cadwalader has been thinking about branching out into activism since late last year. The firm is also working with an activist fund launched earlier this year by Cadwalader’s former head of M&A, Jim Woolery, that hopes to take a friendlier stance toward companies. Mr. Cox also said he believes activism can be lucrative, pooh-poohing another reason some big law firms eschew such assignments—namely, that they don’t pay as well as, say, a large merger deal. “There is real money in activism today,” said Robert Jackson, a former lawyer at Wachtell and the U.S. Treasury Department who now teaches at Columbia University and who also notes that advising activists can generate regulatory work. “Law firms are businesses, and taking the stance that you’ll never, ever, ever represent an activist is a financial luxury that only a few firms have.” To be sure, the handful of law firms that work for both sides say they do so

function is another manifestation of the public/private merger: the for-profit prison companies have, in essence, established themselves as part of the government, and laws are written by them and for their benefit. In the case of the prison industry, that’s particularly

If you went to bed last night as an industrial company, you are going to wake up in the morning as a software and analytics company. The notion that there’s a huge separation between the industrial world and the world of digitalization, analytics, and software— those days are over…. It’s about transitions and pivots and change; these things never happen in a moment or a day or a month but they sneak up on you and they happen suddenly and there are three changes that we are investing in that are important for our future. The first one’s the merger of physics and analytics…. The second big transition is that every customer in the industrial world now knows how to measure and value outcomes…. And the last thing is that it’s not just about GE, it’s about the extended enterprise.

Peter Drucker once observed that the drive for mergers and acquisitions comes less from sound reasoning and more from the fact that doing deals is a much more exciting way to spend your day than doing actual work.35

We knew that the prospect of our little studio being absorbed into a much larger entity would worry many people. While we’d worked hard to put safeguards in place that would ensure our independence, we still expected our employees to be fearful that the merger would negatively impact our culture. I’ll say more about the specific steps we took to protect Pixar in a later chapter, but here I want to discuss what happened when, in my eagerness to ease my colleagues’ fears, I stood up and assured them that Pixar would not change. It was one of the dumbest things I’ve ever said. For the next year or so, whenever we wanted to try something new or rethink an established way of working, a steady stream of alarmed and upset people would show up at my office. “You promised the merger wouldn’t affect the way we work,” they’d say. “You said that Pixar would never change.” This happened enough that I called another company-wide meeting to explain myself. “What I meant,” I said, “was that we aren’t going to change because we were acquired by a larger company. We will still go through the kinds of changes that we would have gone through anyway. Furthermore, we are always changing, because change is a good thing.” I was glad I’d cleared that up. Except that I hadn’t. In the end, I had to give the “Of course we will continue to change” speech three times before it finally sunk in. What was interesting to me was that the changes that sparked so much concern had nothing to do with the merger. These were the normal adjustments that have to be made when a business expands and evolves. It’s folly to think you can avoid change, no matter how much you might want to. But also, to my mind, you shouldn’t want to. There is no growth or success without change.

When Americans sip their iconic Budweiser, they are in fact enjoying a beer produced by a company engendered by a 2004 merger of Brazilian and Belgian breweries that in turn managed to gain control of Anheuser-Busch in 2008, thus forming the world’s largest beer company. Its CEO, Carlos Brito, is from Brazil.

Truth But we have this treasure in jars of clay to show that this all-surpassing power is from God and not from us. We are hard pressed on every side, but not crushed; perplexed, but not in despair; persecuted, but not abandoned; struck down, but not destroyed. (2 Corinthians 4:7–9) Friend to Friend My husband and I were in a waiting period. His company had gone through a merger and was collapsing positions and territories, which left his employment in jeopardy. For months we didn’t know if Brad would keep his job or if he would need to look for another one. During that time, God bid us to trust Him. Choosing to trust God is so daily, isn’t it? When I looked only at the what-ifs of Brad

His other deals had tended to bring together companies from the same industry horizontally, or merge customers with their suppliers vertically, or bring together firms involved in different steps of manufacturing or marketing: this was known as a circular merger. But the merger that had produced C-T-R was, as Flint put it when he looked back on it later in his career, neither horizontal nor vertical nor circular. In fact, it was so uncommon as to almost justify the description sui generis—in a class by itself. Flint soon turned out to be right yet again. The C-T-R merger was a success from the outset. Flint was careful to ensure that a gospel of technical excellence and constant improvement of the new organization’s products was fundamental to its business philosophy.

There are more myths, misinformation, and misunderstandings about value than any other topic in the merger and acquisition field. It is difficult for people to truly grasp the concept that the value of an intangible company is whatever a buyer is willing to pay. Most people believe that companies have intrinsic value, that value falls within a narrow range, and that multiples of revenues are worthwhile. This is simply not true for intangible companies. The

The Mergers and Acquisitions Framework You might use the mergers and acquisitions framework to address cases in which one company wants to acquire or merge with another company. It is best used to determine the conceptual “fit” between two companies: Does joining these two companies have a multiplicative effect, where the whole is more valuable than the sum of its parts?

There are two key aspects of the European model of co-management. First, it gives workers the right to elect a certain share of seats on the board of directors, which as we have seen is responsible for setting a company’s overarching vision and strategy—what to produce and where, how much to invest in new machinery, whether to pursue mergers and acquisitions, and so on—and which appoints the CEO and other executives who are responsible for implementing this strategy.[

The search for “better cab” was not limited to the United States. Cheng Wei, an engineer at the Chinese tech giant Alibaba, missed several flights in China because of his failure to get a taxi in time. Fed up, in 2012 he founded DiDi, which means “beep beep” in Chinese. Now called DiDi Chuxing after a merger, it has become the largest ride-hailing company in the world.

Stefan Falk, a vice president at Ericsson, the Swedish telecommunications concern, used the principles of flow to smooth a merger of the company’s business units. He persuaded managers to configure work assignments so that employees had clear objectives and a way to get quick feedback. And instead of meeting with their charges for once-a-year performance reviews, managers sat down with employees one-on-one six times a year, often for as long as ninety minutes, to discuss their level of engagement and path toward mastery.

Arbitrages: The purchase of a security and the simultaneous sale of one or more other securities into which it was to be exchanged under a plan of reorganization, merger, or the like. Liquidations: Purchase of shares which were to receive one or more cash payments in liquidation of the company’s assets. Operations of these two classes were selected on the twin basis of (a) a calculated annual return of 20% or more, and (b) our judgment that the chance of a successful outcome was at least four out of five. Related Hedges: The purchase of convertible bonds or convertible preferred shares, and the simultaneous sale of the common stock into which they were exchangeable. The position was established at close to a parity basis—i.e., at a small maximum loss if the senior issue had actually to be converted and the operation closed out in that way. But a profit would be made if the common stock fell considerably more than the senior issue, and the position closed out in the market. Net-Current-Asset (or “Bargain”) Issues: The idea here was to acquire as many issues as possible at a cost for each of less than their book value in terms of net-current-assets alone—i.e., giving no value to the plant account and other assets. Our purchases were made typically at two-thirds or less of such stripped-down asset value. In most years we carried a wide diversification here—at least 100 different issues.

the term “merger” should be eliminated from the business vocabulary. There is no such thing. There are only acquisitions.

Three tense weeks later, Mr. Morgan—the man who saved the gold standard in 1895, and the American economy along with it, by controlling the flow of gold in and out of the country, the man who created the world’s largest steel company and first billion-dollar entity by financing the merger of Andrew Carnegie’s steel company with his two biggest competitors—answers the country’s calls for help, and is summoned back from his convention.

His first day on the job came right as Boeing completed its merger with McDonnell Douglas. The resultant mammoth government contractor held a picnic to boost morale but ended up failing at even this simple exercise. “The head of one of the departments gave a speech about it being one company with one vision and then added that the company was very cost constrained,” Hollman said. “He asked that everyone limit themselves to one piece of chicken.

Chase Koch began a rotation of high-level jobs that exposed him to the strategic pillars of Koch Industries’ modern business. It was telling what Chase Koch did not learn. He was not sent to the oil refineries, or to a pipeline farm, or to a natural gas processing plant. Charles Koch didn’t necessarily want to teach his son about the energy industry. Instead, Charles Koch selected a series of jobs that reflected what Koch Industries had become over the last decade and how it planned to carry on into the future. The rotation of jobs was set forth, roughly, as follows: Class 1. Private equity acquisitions and mergers. Class 2. Accounting and taxes. Class 3. Market-Based Management training. Class 4. Trading. One of Chase’s first assignments was to Koch’s development group, the internal committee that looked for new companies to acquire. He joined a division called Koch Equity Development, which bought shares of publicly traded firms. Chase worked in this office when Koch’s acquisition spree was at its peak, shortly after the Invista and Koch Fertilizer deals and during the $21 billion purchase of Georgia-Pacific.

Why is statistical arbitrage so-called? Arbitrage originally meant a pair of offsetting positions that lock in a sure profit. An example might be selling gold in London at $300 an ounce while at the same time buying it at $290 in New York for a $10 gain. If the total cost to finance the deal and to insure and deliver the New York gold to London were $5, it would leave a $5 sure profit. That’s an arbitrage in its original usage. Later the term was expanded to describe investments where risks are expected to be largely offsetting, with a profit that is likely, if not certain. For instance, in what is called merger arbitrage, company A trading at $100 a share may offer to buy company B, trading at $70 a share, by exchanging one share of company A for each share of company B. The market reacts instantly and company A’s shares drop to, say, $88 while company B’s shares jump to $83. Merger arbitrageurs now step in, buying a share of B at $83 and selling short a share of A at $88.

companies save money when they become large, hence more efficient—is often, apparently behind company expansions and mergers.

This was my first experience listening to proposals about the great “synergies” of mergers. As an investor and a risk taker, my focus has to be on what is specifically attainable. Buying another company based on the perception of opportunities for cross-selling and other intangible benefits generally represents a much higher level of risk than I believe is justified. Therefore, I concentrate on eliminating redundancies, which measurably reduces the capital required to run the business.

reminder. I still remember the day my parents told me they wanted to retire and decided to merge their independent movie production company, Dreamessence, with Windsor Media. The Windsors and the Du Ponts had been business rivals right until that point, but the proposed merger changed everything — and not just for my parents.

Steve Schwarzman, a thirty-one-year-old investment banker at Lehman Brothers Kuhn Loeb at the time, burned with curiosity to know how the deal worked. The buyers, he saw, were putting up little capital of their own and didn’t have to pledge any of their own collateral. The only security for the loans came from the company itself. How could they do this? He had to get his hands on the bond prospectus, which would provide a detailed blueprint of the deal’s mechanics. Schwarzman, a mergers and acquisitions specialist with a self-assured swagger and a gift for bringing in new deals, had been made a partner at Lehman Brothers that very month. He sensed that something new was afoot—a way to make fantastic profits and a new outlet for his talents, a new calling.

I know what it’s like to be taken over by another company,” I told him. “Even in the best of circumstances, the merger process is delicate. You can’t just force assimilation. And you definitely can’t with a company like yours.” I said that even if it isn’t purposeful, the buyer often destroys the culture of the company it’s buying, and that destroys value. A lot of companies acquire others without much sensitivity regarding what they’re really buying. They think they’re getting physical assets or manufacturing assets or intellectual property (in some industries, that’s more true than in others). In most cases, what they’re really acquiring is people. In a creative business, that’s where the value truly lies.

Factors that drive turnover for the S&P 500 and Wilshire 5000 stem from market-related events. When a company exits the S&P 500 through merger, acquisition, or bankruptcy, a committee-chosen replacement takes the departing company’s place. The Wilshire 5000 passively accepts the ebb and flow of company creation and elimination, making as-frequent-as-necessary adjustments to the composition of the index. Bankrupt companies disappear, cash merger deals require redeployment of proceeds, and stock-for-stock transactions lead to elimination of the line item of the acquired company. Public offerings of securities force full-replication Wilshire 5000 index-fund managers to raise cash to acquire newly issued shares, while spinoffs simply require adding another line to the list of security holdings. In somewhat different fashion, both the S&P 500 and the Wilshire 5000 produce extremely low, investor-friendly levels of portfolio turnover.

Size and growth rate aside, the companies did have certain characteristics in common. To begin with, they were all utterly determined to be the best at what they did. Most of them had been recognized for excellence by independent bodies inside and outside their industries. Not coincidentally, they had all had the opportunity to raise a lot of capital, grow very fast, do mergers and acquisitions, expand geographically, and generally follow the well-worn route of other successful companies. Yet they had chosen not to focus on revenue growth or geographical expansion, pursuing instead other goals that they considered more important than getting as big as possible, as fast as possible. To make those trade-offs, the companies had found it necessary to remain privately owned, with the majority of the stock in the hands of one person, or a small group of like-minded individuals, or—in a couple of cases—the employees.

By then the conglomerate boom had just about peaked. The problems with merger accounting were obvious, and many investors had realized that conglomerate profits were inflated. The end came in 1969, when the market plunged, making it hard for conglomerates to issue the debt or stocks they needed for new acquisitions. A conglomerateur who runs out of acquisitions is a very unhappy conglomerateur. He’s stuck managing the companies he has already bought, which are all too often third-rate companies in slow-growth industries. Winners buy; losers manage. Worse, the skills that make a successful conglomerateur—salesmanship, impatience with details, and a huge ego—are more or less the opposite of the skills needed to successfully manage a company.

more than half of the companies that appeared on the Fortune 500 list in the year 2000 are now gone. Poof. Vanished off the list as a result of mergers, acquisitions, bankruptcies. The life expectancy of a Fortune 500 company in 1975 was seventy-five years—today you have fifteen years to enjoy your time on the list before it’s lights out.

Such is the legacy of Stan’s final attempt to achieve professional success. Ostensibly a humble shop dedicated to gifting the world with new gems from the mind of the man who made Marvel, POW was, by many accounts, a largely criminal enterprise. It stands accused of routinely ripping off investors, lying to shareholders, entering the stock market through an illegitimate merger, and committing bankruptcy fraud, among other misconduct. Reports differ as to how much Stan knew about what was going on, but even if he was out of the loop, his decision to stay out of the loop and remain uninterested in his own company’s dealings—especially in the wake of the Stan Lee Media debacle—does not speak well of him. Perhaps his neglect meant he ultimately had no problem with the commission of crimes, so long as the company kept filling his coffers with relatively easy money, as one lawsuit claims.

A business that thinks beyond 'profit making' and 'profit maximization' by incorporating corporate ethics and contributes to the society at large, through its well defined corporate social responsibilty policy, is the one that will withstand the test of time and meet sustainable growth in the market. I believe its curve will never grow flat for a good number of years and may only meet merger or acquisitions but rarely a winding up.

Traditionally, companies restructure their businesses periodically to cut costs, primarily through mass layoffs and closures. Perpetual restructuring is a more gradual, moderate, and humbler approach. Instead of slashing costs dramatically all at once, keep your fixed costs steady while growing sales year over year. Operate more efficiently, doing just a bit more each year with roughly the same resources you used the previous year. To achieve those efficiency gains, deploy a variety of smaller restructuring programs that support ongoing process-improvement initiatives. Push to get a bit better—more efficient, more effective, more innovative—each year. Over time, as your business grows, deliver part of the added profits to investors, but set aside a portion to fund additional investments in R&D, geographic expansion, process improvement, sales coverage, and strategic portfolio management (acquisitions, mergers, and divestitures).

Seek outside advice and assistance. Even with a capable internal M&A capability, companies contemplating an acquisition can often benefit from the assistance of outside experts in a particular industry or business area, or from the counsel of an adviser who does not stand to directly gain from the acquisition. Such outside advisers should be used to increase the knowledge and skill of the acquirer, and provide a perspective on the acquisition that is free of traditional industry assumptions and unbiased by internal politics. Most important, the outside adviser should be able to help identify the sources of competitive advantage to be exploited by the merger or acquisition and the best path to obtaining that advantage. How many CEOs do their own brain surgery, close their own real estate deals, or manage their own divorces without the aid of outside advisers?

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