The Apple Computer Manufacturer

Over the past decade, mergers and acquisitions have created an atmosphere wherever big businesses produce synergy by merging within the hopes of expanding marketplace share. Implied from the word "synergy," finally, is really a idea of logic. The deal need to not just be synergistic, it need to be logical.

In 1995, Investment Banker Peter J. Solomon discussing synergy in mergers told a financial reporter: "The goal in any strategic merger is to produce strength on strength. In other words, take in what's good and what you happen to be great at and build on them. What you don't do well, get rid of. That is what makes the strategic merger not just a merger for merger's sake" (Barmash, 1995, A42).

If the merger is done well and if the partners and solutions can produce synergy, then mergers can provide financial stability and the chance for survival that businesses may not have had. But simply with a synergistic mix is not enough.

Barmash, in the article quoted quickly more than things out that "many strategic mergers fail-an estimated 30 percent" (versus 70 percent of conglomerate or intra-industry transactions) (Barmash, 1995, A42). This ways that numerous of the thousands of people unloosed by these deals-12,000 layoffs are planned inside Chase-Chemical merger alone-may were terminated for no valid reason.

 

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