Combining the two companies' agriculture units is expected to create annual savings of $525 million, 40percentt of which will come from cuts in back office expenses and staff, according to the companies.
Any MBA will tell you this presents a tremendous opportunity to consolidate sales operations ("one call, one bill") and rationalize corporate and back office expenses.
That goes a long way at a firm with only eight employees and almost no back-office expense for the simple reason that there is almost no back office.
Analysts also think that the merger will produce savings on back-office expenses and the like.
Back-office expenses such as technology and compliance do not rise one-for-one with assets under management.
But Mary Washington also signs affiliation agreements with providers, receiving help with marketing and back-office expenses.
But it made another mistake, he said, in failing to team up with its sister exchanges in Chicago, a move that he said would allow the three big exchanges here to share technology and back-office expenses.
Back-office expenses of the more than 500 banks and securities firms that belong to the association may decline, he added, as better communications reduce the number of trades that are interrupted because of disagreements or errors.
Diana Tremblay, who headed up labor relations and North American manufacturing for GM, is now vice president of a new unit, Global Business Services, that aims to reduce GM's back office bureaucracy and cut expenses by 30percentt.
Management fees will mostly accrue to each fund, too, though every fund manager will pay into parent company Propeller to cover their shared expenses, including marketing and back office support.
