The link between Sports and M&A

Posted on Thursday, 26 July 2007. Filed under: Commentary, Mergers |

I had the great pleasure of being invited by the founder of EA Consulting, Steve Robson, to speak at a wonderful summer’s event in the London docklands on Thursday evening, July 19.  There were two speakers, and clearly the most popular would be Sean Fitzpartick, who captained the New Zealand All-Blacks rugby team during a legendary period of the 1990’s.

I did speak first, talking naturally about M&A.  I was introduced by a former colleague at Deutsche Bank, Roger Bates, who’s now a director at EA Consulting.  He kindly noted my new book on M&A (on which this blog is based).

Although I had only a half hour to speak, I gave some highlights of many of the topics that I have been recently researching, some covered in that book:  1) the recent success of deals in this merger wave (since 2004 more deals have been successful in the short-term, which is a distinct change from earlier merger waves), 2) how serial acquirers tend to do worse than more focussed acquirers, 3) the need for attention to the post-merger cultural integration issues at every stage in the deal, 4) the role of business intelligence (including the importance of gathering information and even the weak signals from the environment) and 5) the importance of communication especially after the deal’s been announced.   It was all very timely, being a day when Macy’s, Sainsbury’s, Jaguar, Nestle, Pepsi and many other companies were in the news with merger deals of their own, either as target or bidder.  Examples during the talk came from Morgan Stanley / Dean Witter, HP / Compaq, Verisign / Jamba, Texas Pacific / Gate Gourmet, Oracle, Santander / Abbey National and the hottest deal of the day, ABN AMRO with either Barclays or RBS.

Sean’s talk was about how he came to be captain of one of the world’s leading rugby teams in a country where that sport was clearly THE national sport and where he quoted the New Zealand prime minister telling him (and I paraphrase here):  ‘Sean, when you win, I would prefer to be in your position than mine, but when the All-Blacks lose, I couldn’t imagine a worse job.’

Sean didn’t try to draw any parallels with the world of mergers and acquisitions.  Yet the juxtaposition of his talk and mine probably led a number of people in the large audience to tie the two together.  He spoke of the need for teamwork, pride and identifying new ways of doing something (in his case, rugby, of course).  He descibed leadership from the perspective of a captain who led his team to the finals of the 1995 World Cup.  He described good sportsmanship and gave examples where there was none.  He showed how excellence can inspire.  He could have been talking about a CEO leading a company.  

There were two other very relevant points he made about international rugby, but that could have been said about M&A deals:  1) that there’s ever only one winner (and in any merger or acquisition, eventually one side ‘wins’) and 2) there are no equals (that is, there is no such thing as a ‘merger of equals’). 

Needless to say, although he spoke longer than promised, no one left the room. 

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