Today’s business reports are often full of news about corporate mergers and acquisitions (M&A). Interestingly, the current proliferation of M&A activity has a historical context in the Great Merger Movement of 1895-1905. During that brief period in U.S. business history, over 1,800 small firms were absorbed by other companies to create dominant market players.
During the Great Merger Movement, many companies that merged were mass producers of homogenous goods, which benefited from high-volume production. Companies such as DuPont, US Steel, and General Electric established strong market positions through targeted mergers during this period and established a foundation of success that has sustained them to the present day. However, other companies pursued “quick mergers,” which involved companies with different technologies and management and resulted in fewer gains in efficiency. In fact, these “quick mergers” were done because of the broad merger trend and often created new and bigger companies that experienced higher costs.
Clearly, today’s M&A leaders can learn a key lesson from the Great Merger Movement. Executives must scrutinize anticipated business outcomes before undertaking what can be a lengthy, costly, and difficult transition.
About the Author
Finance industry executive Gary Pagar has decades of experience managing M&A functions for top corporations. He has held leadership positions at the Cappello Group, LLC, Westwood Capital, LLC, the Profile Media Group, LLC, MedFirst Healthcare, and the Tribeca Group, LP.
During the Great Merger Movement, many companies that merged were mass producers of homogenous goods, which benefited from high-volume production. Companies such as DuPont, US Steel, and General Electric established strong market positions through targeted mergers during this period and established a foundation of success that has sustained them to the present day. However, other companies pursued “quick mergers,” which involved companies with different technologies and management and resulted in fewer gains in efficiency. In fact, these “quick mergers” were done because of the broad merger trend and often created new and bigger companies that experienced higher costs.
Clearly, today’s M&A leaders can learn a key lesson from the Great Merger Movement. Executives must scrutinize anticipated business outcomes before undertaking what can be a lengthy, costly, and difficult transition.
About the Author
Finance industry executive Gary Pagar has decades of experience managing M&A functions for top corporations. He has held leadership positions at the Cappello Group, LLC, Westwood Capital, LLC, the Profile Media Group, LLC, MedFirst Healthcare, and the Tribeca Group, LP.
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