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Surviving the Corporate Wars

What?s a PR pro to do? Preparing your survival strategy in the age of acquisitions By G.A. "Andy" Marken

Nothing focuses the mind better than the constant sight of a competitor who wants to wipe you off the map.

Wayne Calloway

In January alone nearly $200,000 million worth of M&A (mergers & acquisition) activity was announced.  SBC and AT&T, Procter & Gamble and Gillette, Alltel and Western Wireless, Liberty Media and United GlobalCom, News Corp and Fox Entertainment and the list goes on.  The rising stock market boosted management confidence to do deals. The world economy showed signs of expanding.  All indicators point to a pent-up M&A activity and enthusiasm for 2005.

And while the mind-boggling, record-breaking numbers grabbed the headlines they were only the tip of the iceberg.  M&A specialists estimate that there are nearly 300 friendly and unfriendly acquisitions a day.   Many more ?discussions are started and broken off.

It has been a four-year dry spell for M&A banks.   You can be very certain that they see a very lucrative and busy year for their industry. They intend to get their unfair share whether both parties are ready for the wedding ritual or not.

Hostile and highly public efforts such as Oracles acquisition of PeopleSoft cost PeopleSoft considerable time, money and effort to fight off the advances. In the end it also meant the loss of employment for thousands of individuals. In todays proactive consolidation environment, it is rare for management personnel of public and private firms not to be concerned about the possibility of friendly or hostile tender offers or proxy fights. 

New Language
Todays boards of directors, company presidents and officers have developed a rich addition to their vocabularies.  Expressions like ?lead horse, ?golden parachute, ?white knight, ?scorched earth, ?shark repellent, ?poison pill, ?greenmail and ?arbs are as well understood as bandwidth, VoIP, CPU, SKU, media center PC, venture capital, and burn rate.

Management has added new members to their teams that include takeover lawyers, investment bankers, proxy solicitors and PR counsel.

The new language and team members are key to managements success because there are hungry, smart, and well-paid people across the country who do nothing all day long but dream up deals.  Mergers and acquisitions are no longer mere targets of opportunity.  Today, they are an integral part of many organizations long-range growth strategy.

Unfortunately, few corporate heads have received any training or education in such activities as mergers, acquisitions, and takeovers.  Trial by fire is a difficult way to gain such expertise.

Managements Dilemma
Financial sharks find todays business and financial environment to be a rich feeding ground.  Deregulated financial institutions have produced a new breed of investment bankers and lawyers who have access to large sums of money from banks and investors that are trying to improve the returns on their money.

Its not surprising that healthy companies that have a clear idea of their goals and solid business model sometimes feel like wounded seals in a tank of great whites.

Its little wonder the feeding frenzy gives company management fitful, sleepless nights.  They have to divert their attention from the day-to-day operations and growth of their firms and devise plans to protect their organizations.  Unfortunately most of these efforts are defensive rather than preparatory or offensive.  As a result, they are expensive and disruptive. 

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