“I have 53 stocks in my portfolio, and I have one trigger that will lead me to sell the stocks right away," ... "You do a big acquisition, I’m out of your stock. I don’t care what justification you give me."
Source: https://blogs.cfainstitute.org/investor/2019/02/28/aswath-damodaran-on-acquisitions-just-say-no/#__prclt=kWltZyGY
Also, the acquisition destroys the acquired. I was part of an acquisition some years back. IBM promptly destroyed us. So much so that within the first year, we lost 55 people from a team of 75+. There's maybe 5 left.
Natural attrition, RAs, BPIPs (utilization), and just deciding which parts of our core offerings were no longer necessary for IBM. You know... the offerings they just acquired.
The acquisition made my former company's founders and partners very wealthy. It destroyed us at the bottom of the totem pole, and ruined relationships and careers.
None of us have anything nice to say about IBM after the damage it did to our lives.
"A merger or acquisition is when two companies come together to take advantage of synergies. The combined company is intended to be better than both individual companies due to an expected reduction of financial risks, diversification of products and services, and a larger market share, for example. Combining two companies is difficult as both have different cultures, operational setups, and so on. If management cannot find a clear path in uniting both companies then an M&A will fail."
Still early days, but I doubt this merger will become successful. The ROI since the Redhat merger has been anything but promising, despite a lot of financial engineering to paint a different picture.
Very wise. All the historical data shows that large acquisitions overwhelmingly destroy value.