Random thoughts - mergers, synergy, markstrat etc

The key reason given by business leaders and consultants for acquisitions is "Synergy." Synergy could be in different areas - operations, marketing, financial, value chain, strategic, competitive scenario and so on. One question that I have is, who actually gains from the Synergy - Shareholders of the acquiring firm, shareholders of the acquired firm? If the findings support that no one is worse off, then there is a case for supporting acquisitions and developing specific competence.

CEO's constantly strive to see that they are not a target and spend lot of resources towards this. Consultants keep coming up with different strategies to keep big firms away. But my question is - is it worth all this effort? If higher value is being created overall, then isn't it fine to be get acquired or go and acquire someone else. Yeah, some individuals loose every time an acquisition gets through, so what? Aren't we more bothered about collective welfare than individual welfare

Information asymmetry, integration blues, overestimations that make most of the merger proposals questionable but if more effort is put in this area, it may improve the overall welfare surely.

It must be Markstrat time at ISB and I know that people would be aggressively searching for solutions. My advise is not to search for solutions but search for information and come up with solutions. After one year your job would be to come up with solutions than cookie-cutting. There will be lot information but identifying what is useful and what is not and then taking decisions sensibly is all Markstrat about. Our group was going down steadily during the first three quarters but then we made a turnaround and stood at the top by the end. Good luck for all those trying to sell Sonites and Vodites.