The 1908s was the start of the M&A boom, glorified on the big screen by Wall Street. John Weir Close looks back at those days in A Giant Cow-Tipping by Savages.
The author is a lawyer and a journalist. He founded the M&A Journal and was an editor at The American Lawyer. His book seems to wrap more context, color and gossip around his old stories on M&A deals. The book reads like a collection of stories and lacks a coherent narrative.
You may guess from the title that Mr. Close may have warm feelings for M&A nostalgia, but has no love for the players. He dwells on their flaws. For many of the key players, those flaws were deep.
Many of the deals were deeply flawed. Bidders were fueled by fee-seeking advisers, cheap debt, and hubris. Many of the deals highlighted in the book lead to poor or disastrous results for the companies involved. The reality is that many of the mergers did not necessarily prove beneficial. The resulting company was laden with too much debt or managers who didn’t understand the business.
The book starts by painting the corporate raiders as savages who brought down the managerial elite. CEOs and boards were sitting in comfortable seats and never feared that someone would come along and try to takeover their companies. Companies were then viewed for the break up values and the savages could rip it into pieces to create more value.
The book’s title comes from a statement by Ted Turner during the AOL acquisition of Time-Warner. He didn’t understand how a publisher, trying to sell magazines for a few dollars an edition, could combine with a company trying to give that content away for free. Turner was proved right as the AOL Time Warner merger is one of the worst business combinations of all time and cost Turner a fortune.
Since the book is really collection of stories, it is uneven. Some stories and some players are more interesting than others. Mr. Close is better at eliciting an interesting story in some chapters, but not others. At many times, the lawyer side takes over and dwells on uninteresting minutiae.
If you loved the merger stories of the 1980s you’ll like the book. Otherwise it may not be a good addition for your to-read stack.
Disclosure: The publisher sent me a copy of the book to review.