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Thursday, May 17, 2007

Merger and acquisition

Companies that merge and that is a acquired and acquiring have to go through such a tedious and long process from the top of the pyramid until the lowest of it. I was asked to comment on such activities even when i was a consultant before. My answer still stands as this practice are always unpredictable. It's unpredictable to the second layer of the pyramid until the lowest. Everyone can make assumptions and speculate but the only people who knows whats gonna happen are the BOD or the board of directors.

Obviously the BOD has to know because the process will involve much of their money and if anything happens beyond their knowledge, they will definitely withdraw their money/shares and this will cause a sudden drop in equity and share prices. The speculation will go on until the merge is stabilized which can take years. It will take just a few months to finalised the transaction but the whole transition will take ages.

Merging are revenue focused. After the merge they will concentrate to do anything and everything to boost the revenue. This is why we always see job cuts after merging, they have excess staffs, they want to reduce overheads and other liabilities that caused a burden on the revenue.

Sweet promises are often given by companies that are merging to their employees
They tell that everything will be alright and actually they are telling the truth, it is gonna be alright but for the people that have a strong stand in the company, the category of must stay, must groom and must change in employees are immediately put to the test...however this is all business..nothing personal...

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