And guess what? It turned out that in over 80% of the cases, you didn't have a positive result on the performance of the two merged companies, that the two plus two didn't equal four, it equaled less than four. There was one meta study that was done looking at 50,000 transactions and hundreds of academic studies.
Now, if you look at some of the research around M&A, it's very conclusive. And that's where the seduction of M&A comes in. Or they can go buy a competitor or something off the shelf or even a small company that has some talent that might be able to build it for them. They can either roll up their sleeves, spend more on product development or RND or what have you and- and pull together the solution. Whenever a company is missing a feature, a product, feels that what it has to offer is incomplete in some way, they face a make-or-buy decision. And I'd say the starting point is that the grass is really always gonna be greener on the outside. Richard Kramer: Well, there's a- a range of forces there. I wanna hear from you in terms of, what's the driving force of this huge splurge in mergers and acquisitions that's going on right now? You know? Licking it, shopping up companies like they're Pacman. It- it does seem like we're going through another feeding frenzy in mergers and acquisitions, in corporate development teams and companies, we're working every hour of the day, every day of the week. Welcome back to Bubble Trouble, with myself, Will Page, and independent analyst, Richard Kramer. And asking, do they actually create additional value? Or is it the case that two plus two does equal two? Back in a moment. And we're gonna be exploring the current craze in the mergers and acquisitions going on just now. Which, if I went to school back in the time of Henry the Eighth, was equal to four.īut this week's podcast is called Two Plus Two Equals Two. We're gonna knock out two by two, and it's gonna be two plus two. We're gonna play on that with our title this week. So, management consultants are known for drawing two by two matrixes, being able to frame things that are very simple two by two format. Will Page: Welcome back to Bubble Trouble, with myself, Will Page, and independent analyst, Richard Kramer.
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