IN THE TRENCHES:<br>M&As are alive and kicking
IN THE TRENCHES:<br>M&As are alive and kicking
Where do you work? Are you sure you have the correct company name? What name was on your company building today? What name will be on it next year, next month, next week or even tomorrow?
In a company somewhere today, a receptionist or automated answering system could be welcoming a caller by saying, "Hello, you have reached the Laurel and Hardy Produce Company." Tomorrow, the same system in the same building could change to "Hello, you have reached the Abbott and Costello Produce Company, formerly the Laurel and Hardy Produce Company."
It could happen at lightening speed. As the saying goes, "Here today, gone tomorrow."
Company mergers and acquisitions are alive and kicking. Last year, a little over $800 billion worth of M&As took place. This trend could reach $1 trillion in 2005 as many more deals will be made. The most popular maneuver will be companies buying out others. It has almost become a routine.
There was a young college graduate who joined his father?s company and was given half ownership in the business. He was not as talented as expected, and as a result he kept botching every assignment. His father moved him to marketing. He made a mess of everything in that department. He was placed in the manufacturing operation and managed to foul up things in that area. The plant almost closed. Finally, his father said, "Son, what am I going to do with you? You?re ruining our company."
The young man looked at his dad and replied, "I have a solution. Why don?t you buy me out??
Who is actually vulnerable to an acquisition? The answer is simple: everyone. There is no company currently in business that will be around forever, even major mass-marketers.
There are basic alternatives for a company: merge, acquire another company, be acquired or eventually go out of business.
Old traditional "family-owned? companies are falling fast to the giant corporations. The banner names may stay the same but not under the operating arms of any former family members. At first, perhaps, but they are eventually put out to pasture.
Back in 1906, Charles Von der Ahe opened a 20-foot-wide grocery store. The name Von?s is still around, but the owner is Safeway.
Dominick DiMatteo founded a supermarket chain called simply Dominick?s. Today, Safeway also owns Dominick?s.
At the height of the Great Depression, Joe Bruno started the Bruno?s chain of family-owned stores. In December 2001, Ahold USA became the new owner. Then there was George C. Shaw, who opened his first store in Portland, ME, in 1860. Eventually J. Sainsbury of the United Kingdom purchased the company, and on March 26, 2004, Albertson?s became the new proud owner.
A local California Salinas Valley farmer by the name of Bruce Church began his vegetable growing company in 1926. By 1989, he founded the Fresh Express cut salad operation. In 2001, Performance Food Group acquired Fresh Express, which was recently bought by Chiquita Brands International Inc.
As you can see, acquisition-mania is a never-ending merry-go-round. These integrations are no easy task. Over 50 percent never accomplish any of the financial gains that were expected. In fact, many of them just plain fail.
It's almost impossible to turn on a television or radio, or open the newspaper and not learn of another company acquisition. It's also rare if you didn?t hear about downsides during the transition. The procedure is overwhelming and can take a toll on the entire company.
After an acquisition, the company founders are often removed and discharged, followed by a number of other employees. Afterwards, a combination of other factors may exacerbate problems, especially employee morale. Some of the better people will leave due to all the stress involved.
Following an acquisition, a company has to face the most critical part of the merger process by integrating the people and identifying their assignment roles. Usually, the acquiring company leaders will make that all-famous statement, "Everyone will remain in their present positions. Nothing will change. Carry on as usual." Sure, that will be the day. Job cutbacks are usually at the top of their list.
There is an aftershock the following day of an acquisition. Suddenly your whole world is a different place. There are different people, different positions, different philosophies, different policies and different lifestyles.
Mergers and acquisitions are not limited to supermarket chains. There are a number of growers, packers, shippers and distributors that are open prey to merger downsizing or hostile takeovers. Even commodity boards and trade associations are feeling the squeeze with fewer member companies being involved due to buyouts.
More shocking and unexpected deals will be announced. Don?t be surprised if you soon see some produce company name changes.
In the real world, mergers are not fun. In fact, they are absolutely frightening to say the least. It radiates from the top of the organization in the form of conflicting management perspectives and trickles down through the ranks of people, creating morale problems galore. What did you say the name of the company is that you work for again?
(Ron Pelger is the owner of RONPROCON, a consulting firm for the produce industry. He can be reached by phone at 775/853-7056, by e-mail at [email protected], or check his web site at www.power-produce.com.)
In a company somewhere today, a receptionist or automated answering system could be welcoming a caller by saying, "Hello, you have reached the Laurel and Hardy Produce Company." Tomorrow, the same system in the same building could change to "Hello, you have reached the Abbott and Costello Produce Company, formerly the Laurel and Hardy Produce Company."
It could happen at lightening speed. As the saying goes, "Here today, gone tomorrow."
Company mergers and acquisitions are alive and kicking. Last year, a little over $800 billion worth of M&As took place. This trend could reach $1 trillion in 2005 as many more deals will be made. The most popular maneuver will be companies buying out others. It has almost become a routine.
There was a young college graduate who joined his father?s company and was given half ownership in the business. He was not as talented as expected, and as a result he kept botching every assignment. His father moved him to marketing. He made a mess of everything in that department. He was placed in the manufacturing operation and managed to foul up things in that area. The plant almost closed. Finally, his father said, "Son, what am I going to do with you? You?re ruining our company."
The young man looked at his dad and replied, "I have a solution. Why don?t you buy me out??
Who is actually vulnerable to an acquisition? The answer is simple: everyone. There is no company currently in business that will be around forever, even major mass-marketers.
There are basic alternatives for a company: merge, acquire another company, be acquired or eventually go out of business.
Old traditional "family-owned? companies are falling fast to the giant corporations. The banner names may stay the same but not under the operating arms of any former family members. At first, perhaps, but they are eventually put out to pasture.
Back in 1906, Charles Von der Ahe opened a 20-foot-wide grocery store. The name Von?s is still around, but the owner is Safeway.
Dominick DiMatteo founded a supermarket chain called simply Dominick?s. Today, Safeway also owns Dominick?s.
At the height of the Great Depression, Joe Bruno started the Bruno?s chain of family-owned stores. In December 2001, Ahold USA became the new owner. Then there was George C. Shaw, who opened his first store in Portland, ME, in 1860. Eventually J. Sainsbury of the United Kingdom purchased the company, and on March 26, 2004, Albertson?s became the new proud owner.
A local California Salinas Valley farmer by the name of Bruce Church began his vegetable growing company in 1926. By 1989, he founded the Fresh Express cut salad operation. In 2001, Performance Food Group acquired Fresh Express, which was recently bought by Chiquita Brands International Inc.
As you can see, acquisition-mania is a never-ending merry-go-round. These integrations are no easy task. Over 50 percent never accomplish any of the financial gains that were expected. In fact, many of them just plain fail.
It's almost impossible to turn on a television or radio, or open the newspaper and not learn of another company acquisition. It's also rare if you didn?t hear about downsides during the transition. The procedure is overwhelming and can take a toll on the entire company.
After an acquisition, the company founders are often removed and discharged, followed by a number of other employees. Afterwards, a combination of other factors may exacerbate problems, especially employee morale. Some of the better people will leave due to all the stress involved.
Following an acquisition, a company has to face the most critical part of the merger process by integrating the people and identifying their assignment roles. Usually, the acquiring company leaders will make that all-famous statement, "Everyone will remain in their present positions. Nothing will change. Carry on as usual." Sure, that will be the day. Job cutbacks are usually at the top of their list.
There is an aftershock the following day of an acquisition. Suddenly your whole world is a different place. There are different people, different positions, different philosophies, different policies and different lifestyles.
Mergers and acquisitions are not limited to supermarket chains. There are a number of growers, packers, shippers and distributors that are open prey to merger downsizing or hostile takeovers. Even commodity boards and trade associations are feeling the squeeze with fewer member companies being involved due to buyouts.
More shocking and unexpected deals will be announced. Don?t be surprised if you soon see some produce company name changes.
In the real world, mergers are not fun. In fact, they are absolutely frightening to say the least. It radiates from the top of the organization in the form of conflicting management perspectives and trickles down through the ranks of people, creating morale problems galore. What did you say the name of the company is that you work for again?
(Ron Pelger is the owner of RONPROCON, a consulting firm for the produce industry. He can be reached by phone at 775/853-7056, by e-mail at [email protected], or check his web site at www.power-produce.com.)
