Bob Lewis
Columnist

Choosing the right side after an acquisition isn’t always obvious

analysis
Jun 23, 20093 mins

A merger/acquisition can sometimes make you feel like you're trapped in an episode of "Turf Wars Gone Wild"

Dear Bob …

I’m not sure what to do. My company was recently acquired by a competitor. Nobody here is happy about it. The competitor has a reputation for operating much closer to the “ethical line” than we’re accustomed to and its management doesn’t have a reputation for being very good at what they do.

[ See also: Thinking of going into business with a close friend? Think again | Get sage advice on IT careers and management from Bob Lewis in InfoWorld’s Advice Line newsletter. ]

So far as formal planning for integrating the two companies, we’ve heard a lot about “synergy targets” but not much at all in the way of operational plans.

We all got to this point because we’ve been operating in a very stable marketplace, both companies became fat, dumb, and happy, and then the bottom fell out. Our competitor had more ready cash than we did (our own management “maximized shareholder value” by using our cash to fund a stock buy-back last year), which is why they bought us instead of it happening the other way around.

Yesterday some colleagues invited me to an informal planning meeting. Turned out, the purpose of the meeting was to game out ways we could end up with most of the key positions and management responsibilities and, failing that, to make the acquisition work poorly enough that we’d be divested again.

I kid you not.

My first thought was that I should “do the right thing” and blow the whistle on my colleagues. My second is that this would be a great way to start my next career — as a stool pigeon.

I can’t seem to see my way clear on this one. What do you think?

– Guerilla in waiting

Dear Guerilla …

First of all, I’d say right and wrong have nothing to do with this. Ownership is a very thin reed on which to build a moral code, and you haven’t described an environment that would make me optimistic about the long-term success of the composite venture.

Your colleagues are trying to turn the situation into a “reverse acquisition,” in which one company buys a second company, but the second company ends up in control of the new entity. It can happen, especially if the conspiring managers from the acquired company are excellent strategists and tactitians, while the execs from the acquiring company are naive, weak, and lazy.

You’ll have to judge both groups.

My guess: Your colleagues overestimate their shrewdness, but not the lack of ability of the acquiring company’s executive team.

The way this will probably play out is that the acquisition will fail, the acquiring company will spend years before it gives up, and when it finally spins off the acquisition, the resulting spinoff will be a pale shadow of the original company. Everybody loses.

I’d say your best alternative is to do everything you can to get out of there and into a healthier environment. There’s no side you can choose that will be the winner in any meaningful sense.

If you can’t, you’re probably best off staying with the acquiring company than with Future Spinoffs of America. Develop relationships with the strongest members of the acquiring company’s executive team, offer to help them integrate operations however you can be of most use, and in general distance yourself and your internal “brand” from being someone from the acquired company.

Don’t blow the whistle, though. This would be near-certain death to your career. Just let your colleagues know you aren’t interested in being part of their plans.

– Bob