NEW YORK: A GCI Group study has revealed that negative coverage of five large-scale global M&As exceeded positive coverage in the US media.
NEW YORK: A GCI Group study has revealed that negative coverage of
five large-scale global M&As exceeded positive coverage in the US
Jim Cox, EVP and managing director of GCI’s North American corporate
practice, said the study shows how challenging it can be to merge two
distinct corporate cultures. ’At a time when management wants to be
building enthusiasm and a strong brand for the new company, the merger
integration troubles are often competing for headlines,’ he said.
According to the study, 41.7% of the major media news placements focused
on negative issues, while 32.7% of coverage was positive and 25.6%
The five mergers analyzed were British Petroleum and Amoco; Citicorp and
Travelers Group; Daimler-Benz and Chrysler; Deutsche Bank and Bankers
Trust; and Exxon and Mobil.
A number of other M&A-related studies have pointed out that PR and IR
pros working on these deals have their work cut out for them. An A.T.
Kearney look at 115 global mergers between 1993 and 1996 revealed that
58% of the deals failed to create substantial returns for shareholders,
while KPMG found that 83% of the 700 largest cross-border deals between
1996 and 1998 failed to produce shareholder benefits and that 53%
actually destroyed shareholder value.
’One of the things that we see for law firms and companies is that they
will shout how great the merger is going to be today, but then they
don’t follow up,’ said Levick president Richard Levick. ’You need to
continue to focus on the benefits to clients and consumers.’