Mergers & Acquisitions

Sunday papers had speculations that there is an imminent merger of Schering-Plough and Bristol-Myers Squibb. Actually it is a reverse merger - which would create the world's largest drugs group with a market capitalisation of around $80Bn.

Now I know why accounting moved from merger accounting - this is not a merger is it ? BMS is by far larger than Schering so definately they are not equal - one party will definately be dominating. True and fair view.

By the way in Kenya we never seem to hear much about M&As - it's big business here. Businesses are always on the look out predator and prey relationship.
Another interesting article was the most respected companies and Johnson & Johnson was the leader - it is interesting to note that the management of JnJ have steered off acquisitons that are contested - It destroys value. Once value is destroyed shareholders are mad and the company attracts negative publicity. The poll was conducted among fund managers.

I should find out which are the respected companies in Kenya - not solely in profitability terms. Other criteria would include clear business strategy laid out by the management (I'm still waiting to hea what Uchumi is up to).

As if that was not enough there is talk of Corus the indstrial steelmaker is desparately searching for a suitor! (Is that how it feels to be in a crowded dance floor and you are not the most attractive?)

Merck is after Serono with the aim to be the leader in the Biotech industry.

In all these activities underlies what drives capitalism - the need to be the strongest and always leadier. Why didn't think of this? You need to keep competitors running for their money, utilise the fact you have the brand name - all households in Kenya know Uchumi, like WalMart it could have controlled its suppliers
STRATEGY: Let the small competiton see the reason to run from you.

Ethics? Everday we hear the Boeings, WalMarts, Tescos among others being criticised - but guess what - they are the still the leaders. (OOoops I conveniently ignore Enron)