who have made the synergies promised at the outset

The marriage, is an old Chinese proverb, as a besieged Citadel. Those who are outside dream enter when those inside dream out. Those who want to enter, are well known, they are one of the "Echos" every day. Starting with Mittal Steel which has been hit the headquarters of his belle Arcelor during nearly five months before the convince falling into his arms. But also attended the week before the conquest of the telecoms of Siemens by Nokia, which in turn, responded to the union between Alcatel and Lucent. Not to mention the pretenders fobbed as Enel who covets Suez, which itself has eyes only for gas France or Veolia burning to da Vinci.

The arguments advanced to justify such fever are multiple but can be summed up in two: the pretender is either instant entry into a new trade or immediate size gain on his trade existing. A coup it retrieves, in theory, market share, production capacity, research laboratories, talent. With the idea of course to do better in two that separately. Specialists talk about synergy of costs savings on research, purchasing, production and trade and synergy of income, i.e. the additional growth generated by size on the market or the lure of a more comprehensive offering.

Behind the scenes, two other factors play a decisive role. The first concerns the sensitivity of the management to the effects of mode (size race) and its desire to preserve its position (fear of a takeover bid). The second relates to the desire to improve in his favour power customers and suppliers by reducing the competitive pressure. Steel producers such as Arcelor, Mittal and Severstal, sandwiched between a handful of mining companies (three major players in the world) and powerful clients such as automakers, seeking to increase their bargaining power to control prices and limit the highly cyclical nature of their activity.

So much for the theory. In practice, the fiancés Bolivia quickly once crossed the threshold of the Town Hall. Hard to take if promises. According to the firm McKinsey, who has studied 160 merge operations in recent years, only 35 of them can be considered as success, i.e. who have made the synergies promised at the outset. Loss of clients, failure of major projects, persistence of cultural differences, weak integration of management, poor communication, flight of the talents, the disillusionment many...

With sometimes heavy consequences perceived long after. The EADS case is indicative of a situation where still weigh the consequences of the bad integration of Airbus EADS and especially the merger between enemy brothers Aerospatiale, Matra and Deutsche Aerospace. A cartoon with the stack of three successive mergers (Airbus, Aerospatiale/Matra, EADS) and structure managerial head which limits any real integration.

Generally, if a majority of companies achieve the cost reductions expected, less than one third, according to McKinsey study, arrive into the virtuous circle of revenue synergies.

Ironically, in the field of technology, yet one of the most active mergers and acquisitions, that the results are the most disappointing. In this sector, none of the studied transactions not identified benefits expected in terms of growth, which was the first motivation for marriage!

In many cases leads to loss of market, rather than gains. One could cite the marriage between Hewlett-Packard and Compaq, the latter already penalized after a merger failed with Digital Equipment, or between Capgemini and Ernst & Young and, more recently, the acquisition of PeopleSoft by Oracle.

Surprisingly, those operations which involve the future of the company are in general poorly planned and poorly executed. Thus, the "due diligence", these studies of the accounts and the target market data are carried out far too quickly and lead to overly optimistic estimates. It is true that the complexity of economic models (particularly in the high-tech) and unable to speak with those who know the trade on the ground before the conclusion of the operation makes the perilous exercise.

Enforcement, two sensitive points are inadequately prepared: the integration of the products and technologies and the accession of the employees. Either research or commercial, the newlyweds leave often coexist several lines of products or research projects that are devastating at the time all expected synergies. Thus, when Oracle has absorbed its competitor PeopleSoft in enterprise software, it thought it could merge products quickly, but, under pressure from customers, he had to promise to keep the two lines and to ensure the maintenance for many years. While research, many are reluctant to dispose of in the heat and leave to develop projects in parallel. If it takes several years before making an offer unified, cost savings are not there, prices go back (or profits fall) and market collapse.

In human terms, the suitability of the commercial teams, the motivation of managers, especially in the case of the absorption of small structures, endanger the building. According to McKinsey, if more than 50 of the banks that merged were able to keep at least 80 of staff two years later, only 20 of high-tech firms have succeeded this performance!

What to do First, less than operations. Resist the illusion of artificial growth (see the example illuminating service Altran society which clearly had an economic model) and retain only the best projects controlled. Better planning phase the successor to the announcement, including multiplying the cross-cutting teams because the synergies are between R & D, purchasing or selling within each of these functions, and finally empower the hierarchical lines at the beginning of the operation. In short, a successful marriage, reason or love, preparing in advance. Academe in Don Juan, the conquest of the beautiful should not be an aim in itself.