Monday, January 25, 2010

From here: Corporate merger is sold by corporate gurus as rich in synergy and efficiencies that eventually trickle down to consumers. But the supposed consumer benefits are often unconvincing. Pennzoil’s acquisition of Quaker State led to more expensive motor oil, Procter & Gamble’s purchase of Tambrands led to more expensive tampons, and General Mills’ purchase of the Chex brands led to more expensive cereal...
Could it be that after the merger is completed, the savings that result a year after the 'redundancy cuts' are no longer invested into better products and R&D but are distributed in the form of bonuses to the architects who devised the merger and the only way to show profits in the years afterward would be to increase the product price? I am sure there must be a study somewhere… A thought...

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