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thatcrazycajunNewsweek magazine's latest issue features another edition of one of my favorite columns, Allan Sloan's "The Cruncher." I don't usually read financial columnists, but Sloan has the ability to explain arcane deals and shady shenanigans in the boardrooms of the world without making my eyes glaze over, and do it with wit and style while he's at it.
This week, he tackles yesterday's announcement that the supposed "merger of equals" that created the German-American automotive behemoth DaimlerChrysler is now being undone, with help from another of those private-equity firms that seem to be buying up struggling companies left and right lately like it was the Gordon Gekko 1980s all over again. His analysis appears here.
What the executives who forged the deal touted as a "transnational" titan that would be greater than the sum of its two foregoing parts turned out to be far, far less, courtesy of unexpected sea-change in the automotive business and the problem Chrysler shares with many other companies 25 years old and older: lots of old retired employees with pension and health-care promises in hand, and a shortfall in money to pay them brought on by foundering sales. Now they're paying to get shut of the stock-market boat anchor that is Chrysler and go back to being just plain Daimler again...and paying through the nose, both ears and the asshole to do it.
One can hope that other firms contemplating getting bigger and richer by buying up a competitor rather than, well, competing will think twice in the wake of this, the biggest M&A fiasco since AOL Time Warner...and one may also hope that swine will aviate.
This week, he tackles yesterday's announcement that the supposed "merger of equals" that created the German-American automotive behemoth DaimlerChrysler is now being undone, with help from another of those private-equity firms that seem to be buying up struggling companies left and right lately like it was the Gordon Gekko 1980s all over again. His analysis appears here.
What the executives who forged the deal touted as a "transnational" titan that would be greater than the sum of its two foregoing parts turned out to be far, far less, courtesy of unexpected sea-change in the automotive business and the problem Chrysler shares with many other companies 25 years old and older: lots of old retired employees with pension and health-care promises in hand, and a shortfall in money to pay them brought on by foundering sales. Now they're paying to get shut of the stock-market boat anchor that is Chrysler and go back to being just plain Daimler again...and paying through the nose, both ears and the asshole to do it.
One can hope that other firms contemplating getting bigger and richer by buying up a competitor rather than, well, competing will think twice in the wake of this, the biggest M&A fiasco since AOL Time Warner...and one may also hope that swine will aviate.
