Something To Realise About Takeovers/Mergers

Tue 29 July 2008 by Garry Bodsworth

I heard on the news today that BA and Iberia are planning a merger. That isn’t anything special in the grand scheme of things (especially to a programmer), but they emphasized something interesting, that they would be kept separate brands like they are separate entities.

This never ever happens after a takeover/merger. Promises are made that you will be kept a separate operating entity but as soon as the deal is done all bets are off. Even if it does happen in the short term in the medium term you can guarantee that the job-churning in the board room will mean that previous policies get overturned. Bear in mind the average CEO tenure is five years, and that study is three years old, so imagine it is even less now (since the average was 9.5 years in 1992 and 7 in 2001).

So, if you are ever in a takeover, be aware that unless it is written down and so expensive to get out of that they would never go back on it, it’s unlikely to turn out the way you would imagine.