November 4, 2024

Most mergers fail.  This was one of the key points that my corporate law professor at Oxford University made in my favorite course, Mergers & Acquisitions. Why? Well, for several reasons, but often because the motivations are poor: one of the marriage partners (sometimes both) has run out of vision, they have come to the end of a product life cycle, they have failed to recreate themselves with a recent initiative, or their leadership has seen significant turnover. The reality, therefore, is that a merger rarely creates extra long-term value, perhaps at best a short-term market consolidation. They may save face and squeeze some crumbs of value left, but they almost never create meaningful value. I had seen this in spades when I worked in the M&A advisory departments of Barclays and Schroders (now Citibank), one of the blue-blooded advisory firms that dominated the UK scene. I brought this lens to the independent school merger in 2006 (one that saw positive outcomes) that I led as CFO, High School Principal, and AHOS: it created one of the largest non-profit schools in Los Angeles, Sierra Canyon School, now with an enrollment of over 1,000 students.

When I…