I’ve always been a little perplexed about the concept of a merger.
Mergers are a popular concept among big companies to combine companies that share similar business models. The reason for the merger is usually to increase the size of the company, so the owners of the two companies split the stock and get bigger shares in the new company.
That’s not what a merger is. A merger is when two or more companies merge to become a new company. A merger can happen with just one company in a merger (in which case the parent company becomes a subsidiary or division of the new company), or it can happen with hundreds or even thousands of companies in a merger (in which case the parent company becomes a new company).
Most mergers are done to increase the size of an existing company, usually to get a new office and division. A few mergers are even done to increase the size of all the companies in a corporation. An example of a merger that is done to increase the size of a company is the merger of Sun Microsystems and SuSE.
As you may know, Sun and SuSE are quite closely related. SuSE is a Swedish company known for its software, and Sun is a Taiwanese operating system company. While they are currently unrelated, they have become the largest shareholder in each other’s shares. SuSE was formed by Sun to merge Sun’s Internet services division with SuSE’s other company, Jolla. Sun was forced to sell Jolla and its businesses to SuSE.
We’ve done all we can to keep Sun open, but we’re not. It would be pretty strange to take out one company without looking at the whole picture.
The merger has been a huge success for Sun, who acquired Jolla in 2010 and now own both companies. Its business has continued to grow, but its shareholders are demanding that Sun make a substantial effort to expand the company and make the merger more profitable. SuSE is very interested in acquiring Sun, and while buying Sun would be a massive deal, SuSE would need Sun to keep its business activities going even after the merger.
I have to admit I really like the idea that a merger of two companies could be a massive success. I also admit that, for some reason, I don’t really know what the business of Sun is. I would very much like to know this. What I do know is that Sun is one of the biggest companies in the world, and I would like it if there was a merger of Sun with a company that was more profitable. And SuSE is the most profitable company in the world.
Sun is a huge European company, while SuSE is the most profitable in Europe. And even though Sun is a big European company, it is not the biggest company in Europe. It is far behind.
In any case, we’re already seeing a wave of mergers that will be the death of smaller companies because, without massive synergies, it is simply too hard for the smaller companies to compete. So this is one of those times when it makes sense to look at how mergers work. To get a more in-depth understanding of mergers and acquisitions, check out The New York Times article “What Mergers are and How They Work”.