I would like to get your opinions on two companies merging to expand. What is your opinion? Negative effects? Positive effects?

Why it would be a good idea or a bad idea. Looking forward to getting some great responses on this one :)

Are you offering different products/services that would compliment each other? Or are you offering similiar products/services?

Are you offering different products/services that would compliment each other? Or are you offering similiar products/services?

I think his mean similiar products/services

Ie. What sort of merge is it? ;)

Similar products and services.

Wouldn't it depend upon the specific companies merging?

If you feel there is synergy in the merging process both as far as sales and growth is concerned and are comfortable in giving up osme control (mergers tend to do that), why not! go for it!

You really would nee dto be able to work well with other people, especially the owner / manager of the other company.

Will you be disadvantaged by the merge?
How will disagreements be handled between the two new managers?

These are some things you will need to take under consideration.

IMO Merging to similar product or service company would save you the overall cost and staffing cost. :peace:

Just so everyone is clear, it was just a hypothetical question, we are not merging with anyone :)

So far whomever I have talked to has mentioned the disasters of companies M&A. M&A rarely go well.

It all depends, I would not go wel in a merger unless I had the controlling share, to me it would feel like handing over what I have worked at with somebody else (even though they have worked just as hard) and losing control in the processs.

Well, if a merger goes well, especially in the web hosting field, it can be beneficial to both companies. That's just my opinion though..


Later,
Nick

its really different in every situation.

Each company needs to write a list of advantages and disadvantages to itself as its own entity. If both companies have more advantages than disadv's and similar sized lists then its win win. Unless your going to merfe into something relevant and gain some kind of monopoly or remove competition in a relevant scale then I wouldnt recommend it.

Just so everyone is clear, it was just a hypothetical question, we are not merging with anyone :)

So far whomever I have talked to has mentioned the disasters of companies M&A. M&A rarely go well.

Ali, M&A is the current trend in business, that will grow even further. Big (really big) companies are choosing this route to save costs and increase efficiency. e.g. Time Warner and AOL, HP and Compaq, PeopleSoft and Oracle.

The key is planned M&A. Do proper analysis of strengths and resources of both companies, Draw a roadmap and see what would be gains and losses as a result.

Merging is beneficial for the bottom line for sure, however if merging involves any sort of change on the customer end then you could lose customers. I recently did some work for a company that had "merged" with a smaller company about a year earlier. They basically lost about half the customers they gained through the merge that year. Consolidation is slowing becoming the norm in the hosting industry as the market is over saturated. My guess is we will start seeing more and more merges, takeovers and buyouts as companies try to grow any way they can ...

Ali when it comes to mergers I think it's important that both companies have the same goals and visions, as well as compatible management structures. What I mean by this is that both companies will be able to function as one without constant arguments and problems. A merger can be a great thing if the management of both companies is able to work together, on the other hand it can be a disaister if you cant agree on anything.

Before merging I would do my best to get to know everyone in the other company and get a feel for how they work.

Obviously there are other factors to consider when merging for example the income generated by the other company, their client base as well as other things.

With mergers, the only thing that tends to go wrong is that the bigger company takes more power over the smaller one. If you can control that then it's all good. In some cases that's even better though.