Beware those offshore expansions

When announcing that they are expanding offshore, companies are quick to point out potential synergies, savings and profits. But often such moves are expensive, with the shareholders footing the bill.

Simon Brown

how many successful large mergers, acquisitions or moves offshore can you name? A few jump out at me: SABMiller, Bidcorp (under the then Bidvest), Steinhoff and BHP* (the latter narrowly avoiding disaster when its 2007/08 attempted takeover of Rio Tinto ultimately failed). My point is that while these largescale deals are usually met with delight from the market at the time, the truth seems to be that most of them end up failing or are, at best, disappointing. Sure, they muddle along and sometimes admit defeat such as Discovery* did with its US debacle, and Old Mutual in the case of its UK adventure. Very few such ventures turn out to be the huge successes shareholders were initially promised. Whenever a large non-hostile deal is announced, management always talks about synergies, savings,…

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Finweek - English (Digital) - 1 Issue, 02-nov-17

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