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Will the TI-NSC merger be a winner, loser or both?

Posted: 13 Apr 2011     Print Version  Bookmark and Share

Keywords:TI/NSC acquisition  mergers and acquisitions  TI-NSC merger's implications 

With the initial reactions, speculations and interpretations on the Texas Instruments-National Semiconductor Corp. merger deal having done its rounds, here's another probe into whether this acquisition will be a winner, loser or both.

Long story short: I don't know, nor does anyone else know with high certainty. But I do have some perspectives on acquisitions in general, and high-tech ones in particular: I think that they are less than successful, in most cases. Why? I have these reasons:

� During the period between the initial acquisition announcement and formal legal closing, the company to be acquired has difficulty maintaining internal momentum, despite assurances by both parties. Projects are put on hold, initiatives are slowed down, expenditures are frozen and everyone becomes cautious.

In our very competitive industry and economy, going into a sleep or quiescent mode is like taking yourself out of the game to rest for a while—but the game doesn't stop. The official line is "for now, everything continues as it was," but that's never the reality.

� On the acquirer's side, management becomes pre-occupied at looking at the specifics of their soon-to be-acquiree. There are meetings, reviews, need for all sorts of numbers and analyses, and many other time-consuming activities that take away from the business fundamentals of identifying and developing products for the customers, and then delivering and supporting them.

Sometimes the acquiring company suffers almost as much as the acquired company, as the mechanics of integrating/slimming two companies, two product lines, two cultures, and two of everything consumes time, energy and attention, while the real customers get pushed to the side.

� Everyone is afraid for their jobs. When reductions come—and they do—very good people who just happen to be in the wrong place at the wrong time are let go, some of whom contribute in subtle but vital ways to the "secret sauce" that produces winning products.

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