Mr Hill reckons the average economic value-added, above the cost of capital, of pharmaceutical companies that have merged in the past nine years fell by at least half after the merger.Why, then, do they do it?
LH: For me, it's the last half of the merger episode — when it felt like the show was truly firing on all cylinders, focused on business and Peggy, Don and Roger.
Two-thirds reported it was possible or likely that they would enter into a joint venture over the next 12 months, while nearly half said a merger or an acquisition was a possibility.
FleetBoston had previously said that about 5,000 jobs would be eliminated as a result of the merger, half of them through attrition, a hiring freeze and the sale of branches.
Since 2010, about 40 college mergers across at least nine states — a little less than half the total mergers in that period — have involved at least one public college, according to Higher Education Publications Inc., a directory company.
Of course, drug corporations are also in on the game – accounting for about half of healthcare mergers.
Repeated analyses by business gurus, management consultants and investment bankers have all reached the same conclusion: in the medium term, fewer than half of all mergers add value.
In the case of Mr. Harrison from Chase, half of his merger-related bonus is in restricted stock and depends on the shares of the merged company, J. P. Morgan Chase, reaching $52.
Germany had eight big electricity producers in 1997, before the government liberalised the market, but the number has since fallen by half because of mergers and takeovers, says Uwe Leprich of the Hochschule für Technik und Wirtschaft in Saarbrücken.A second problem is that Germany's biggest electricity generators also own the networks that distribute electricity.
In half of all mergers the buyer pays in cash only.
