Top executives talk mergers and acquisitions at conference

Mergers and acquisitions have caused corporations to change their names in the past few years faster than one can say "DaimlerChrysler." At a conference that the Wharton Management Club sponsored last Friday, several corporate executives and business leaders who have played an active role in company mergers were on hand to share their experiences with about 70 Penn students in Vance and Steinberg-Dietrich halls. "Many students come to Wharton knowing they want to do mergers and acquisitions and investment banking, but they don't know what it entails," conference chairperson and Wharton sophomore Janice Yu said. "We wanted to expose students to areas of investment banking and mergers and acquisitions in the telecommunications, insurance, biotechnology and financial sectors," she added. Yu pointed to the recent growth rate in mergers and acquisitions despite problematic financial markets in East Asia, Russia and other international locations. Executives from deal-making firms like Goldman Sachs offered a financial sector perspective on mergers, while top officials from newly merged firms like MCI Worldcom, PricewaterhouseCoopers, Chase Securities and Citigroup explained why their firms merged. "It's not just a change in capital structure -- it has got to be a change that increases the value of your firm," said 1991 Wharton graduate Mark Feldman, vice president of global mergers and acquisitions for Chase Securities. And 1974 Wharton graduate and Travelers Group chief executive officer Jay Fishman cautioned that the recent trend of corporate mergers "is not a business strategy," but is instead "a reflection on changes in the business environment." Globalization, increased competition and the increased speed in relaying information have made these mergers more pronounced, Fishman said, explaining why his company merged with Citicorp in April 1998 in what was considered the largest merger at the time. Citigroup is now the 12th largest corporation and the third largest business insurance firm in the world, according to Fishman. Other executives pointed to the need for additional resources and increased market share, since clients now require a greater breadth and depth of services than they have in the past. Still, all of the executives were quick to point out that the transition isn't always smooth. "The biggest problem of a merger is changing the [rigid] mindset of 'we used to do this but they do it like that,'" said Duross O'Bryan, a top partner in the financial services division of PricewaterhouseCoopers. "Seven months into [our merger with Coopers & Lybrand] and that's still a cultural issue that is hard to get over," O'Bryan said. In addition to having to lay off workers as his company downsized after merging, Fishman related some of the problems his company faced. "At the very least, there are two people who hold the CEO position, and you must decide who will hold that position [in the merged company]," he said. Students gave the event positive reviews. "You hear about mergers and acquisitions every day, but unless you read The Wall Street Journal every day, you don't often see tangible results," Wharton sophomore Huijin Kong said. For College and Wharton sophomore Elizabeth LaPuma, the conference had a more practical implication by helping her decide which type of summer internship she wants.

Please note All comments are eligible for publication in The Daily Pennsylvanian.