Sorry… I was wrong! Until recently, I would have said that emotional factors have more bearing on M&A transactions involving SMEs than major corporate transactions. SME owners are more affected by personal issues and emotions than the big corporate players, surely? Corporate transactions are based more on technical negotiations, and all parties at the table are highly experienced professionals.
How wrong could I be?
Omnicon Group and Publicis Groupe are two giant multinational advertising and public relations companies, who decided to merge with the aim to be the ‘Number 1’ in their sector, worldwide. Each has tens of thousands of employees and billions of dollars of turnover. Publicis is headed by Maurice Lévy and Omnicom by John Wren. They announced their intended merger in July 2013.
According to an article by David Gelles published at NYTimes.com on May 8, 2014:
“The ad giants Omnicom Group and Publicis Groupe called off their $35 billion merger […] Both Mr. Wren and Mr. Lévy are strong-willed, and people close to the deal said that their personalities clashed. […] The two companies find themselves back in the same competitive spot they were a year ago.”
If this information is right, I was wrong in assuming that such top executives would be deciding matters logically, and that their personal emotions would not be playing too much of a role.
Conclusion: All M&A projects are personal, and all involve emotions. ☺
(Supplementary information: Maurice Lévy is 71 years old, John Wren 60)
If you want to read the article in NYTimes.com please click here.
Oldie of the week: Crowded House – Don’t Dream It’s Over (1986)