Mergers & Acquisitions: A Trend That is Bound to Carry On.

Posted on Facebook, Oct 2022. Pasckie Pascua.

THE NEWS. “What the $24.6 Billion Kroger-Albertsons Merger Could Mean for Groceries.” / “As Fox and News Corp Weigh Merger, an Activist Has Its Own Vision.”

Mergers and Acquisitions. Old, new story. As inflation continues to drive food prices up, and as e-market topnotchers Amazon and Walmart continue to rule retail, Kroger and Albertsons, two of the largest U.S. supermarket chains, move to link up as one.

       Meanwhile, in a related news, in high-end communication galaxy, Irenic Capital Management, which has a $150 million stake in News Corp, wants the company to split up its media and real estate listings businesses. But then, who cares, LOL! M&A is the name of the Fortune 1,001 game—and it seems working, or no brainer. It’s obviously win-win for the 1 Percent Capitalist.

       In 2021, there were 676 merge and acquisition transactions in the U.S. valued at more than $1 billion. Overall, the number of M&A deals last year was 21,107, up from 15,103 in the previous year. For this year, so far, companies have announced slightly more than 22,000 M&A deals, with a total value of $1.85 trillion. 

THE M&A trend is bound to carry on and expand since consolidation (of market share) etcetera work/s for giant corporations or leading franchises. Let’s (re)check the ups.

       A larger business, or one that has joined forces with another business, typically has higher needs in terms of materials and supplies. Purchasing necessary raw materials and/or supplies at larger volumes results in cost efficiency. Significantly, companies joining up means lower labor costs. Multiple staff members doing the same job at each individual company equals lower overhead and operational costs. By eliminating extraneous staff, a business can reduce its overall labor costs while maintaining a stronger, more effective labor force.

       Another: Increased market share by tapping into the resources that both bring to the business deal. This can help companies offer more products to consumers. And so on and so forth. 

SO what’d be the disadvantages of mergers and acquisitions? I don’t know. Start googling. Let’s simplify beyond Mergers & Acquisitions to a similar corporate trick that leave SMEs’ back up against a wall.

       Buyout. Example: If my tiny but thriving entrepreneurial venture which probably earns a few thousands of dollars each month is approached by a giant (who also do the same business, somehow) and is offered $25 million to gobble me out? Or maybe they’d instigate an internal tempest and then my employees threaten me all kinds of (il)legal stuff? What must I do?

       So why not just buy my company? LOL! Maybe you’d say I am a sell-out, right? But then isn’t that happening all over? Let’s start with Adam Neumann, ex-CEO of WeWork. He didn’t really “fall” as media put it. You may look up what he has been into after his supposed “ruin.” More companies!

       Yes, in his regard, why merge? Buy me out. Done. Then I will start a new kickass outfit. Fun!