Like a boil reemerging after years in remission, like a pestilence of locusts descending from a clear blue sky, like a bad odor coming up from the waste treatment plant across the river now that winter is fading, mergers and acquisitions are back. Perhaps I’m being a trifle negative. M&A fulfills important functions in the business cosmos, much the way arachnids keep the world safe from overpopulation by mosquitoes. Certainly, some people must benefit from the mindless, heedless, often doomed merging of two entities.
Is it you and me? By that, I mean the people in the corporation who come every day from our pleasant, relatively modest abodes to work for our living, earn adequate but not lavish compensation, fly commercial, worry about making our numbers, have no pension. You know — us. Do we benefit from being merged? No. We don’t. Not unless you count pure survival as a lovely benefit.
What about an acquisition, when our leaders acquire something for their toy chest? Not necessarily. Decades ago my corporation of feisty Visigoths marched into Rome, in one of the major acquisitions of that time. What happened? As Ishmael reports at the end of Moby-Dick, “And I only am escaped alone to tell thee.” That’s right. Everybody … died. Except me. All the Romans, by the way, are fine.
How about all the tradesmen, support staff, mailroom guys, and vendors, the rude mechanicals who keep the great beast in working order? Nope. They’re screwed. After a merger, the company enters a period of euphemism in which it “manages efficiencies,” “rationalizes expenses,” and “finds redundancies.” This is the way the system justifies the merger, by making one plus one equal one. If you’re one of the ones in the one, you’re done.
But come on! Business isn’t stupid. It doesn’t engage in fruitless activity! Money is being made — oh, excuse me, value is being created — for somebody, right?
Well, first and foremost, bankers are very happy. Bankers don’t even have to accomplish anything tangible. Meetings are taken. Fees are levied. They don’t even have to invent a nutty investment vehicle to make a killing. The insanity is at the company level. Bankers just help.
Lawyers, of course, are necessary. They’re value-free on this kind of thing. It’s not their job to ask, “Why should we try to graft this hedgehog onto this warthog?” Theirs is to say, “Here’s how we do it.” And they like to be busy, particularly the out-of-house ones, who bill by the hour.
Management consultants are necessary after a merger, to help senior management feel as though it’s handling the organizational issues. Often they are instrumental in transferring the money that would have been made by other people, now let go in a reorganization, to themselves.
Ultra-senior management of both firms in a merger tend to do well. Sometimes a few of them lose their position, which is hard. But that’s why God created parachutes of silk, gold, and platinum. Pretty things. Hope you get one one day.
Oh, and the business media practically soil themselves over an uptick in M&A. After all, reporting on everyday business is like being a war correspondent in peacetime. The prospect of covering takeovers, invasions, and bloodbaths in corner offices makes them feverish.
Finally, there’s one group that adores the whole high-end casino zeitgeist of the M&A biosphere, fueled with action and the rarefied air of all-night dealmaking. And that’s Wall Street. Which fighter are you going to lay your money on as they grapple to the death? Which horse do you think may cross the finish line first? Which stock should kick up nicely if this merger comes to pass? Come on now, shareholders. Game on. You can’t win if you don’t play.
This story is from the March 18, 2013 issue of Fortune.
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