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Management Side
On mergers, consolidations and acquisitions

Aside from the obvious, the pulp and paper industry has at least one other thing in common with the newspaper industry: Mergers, consolidations and acquisitions are the rule rather than the exception.

There have been good mergers and acquisitions, and there have been bad ones. As to the latter, more often than not, the only consideration is the bottom line.

Make no mistake, the bottom line is important. Damned important, as every independent business owner understands.

But sometimes, in the case of the "bad mergers," the one business variable that is too often overlooked is the obvious one: The paying customer.

Granted, sometimes the short-term payoff is part of the pre-calculation as to potential long-term profits and losses. As long as you're investing your own capital, who's to argue?

However, if the objective is, in fact, a long-range one, those involved in the business merger/acquisition would be wise to keep the paying customer in the equation.

In the late 1990s, I witnessed – from the inside – a newspaper acquisition that proved to be an abject failure by the acquirer.

The corporate buyer failed to listen to its administrative leaders in the given market. The buyer took, at face value, the circulation numbers of a longstanding group of newspapers in southern Ohio (U.S.).

The buyer also failed to comprehend – in spite of such warnings – that both buyer and seller had served the same market and, as such, there was not a substantial increase in either circulation or advertising revenues to be realized.

As it turned out, the aggressive buyer lost his proverbial arse, while the seller smiled all the way to the bank.

Had the buyer listened to those real managers on his staff – the very people in the given market – a lot of money could have been saved – and more money could have been made. (Sometimes, "corporate" doesn't always know best.)

Barring outside influences (say, tax abatements, revolving loans and other political perks), anyone who's been in a successful business understands the importance of the paying customer. Thus, sound business decisions are best made on how to provide the customer with a high-quality product, great service, and a fair price.

Before considering your next merger, ask yourself if these conditions will be enhanced after the fact. If not, you're most likely either in it for a short-term windfall or some of those aforementioned political perks.

It's your choice. (And your money.)

On the bright side, as long as human beings continue to spend more time wiping things and packaging things than reading things, you'll probably be OK. (Wish I could be as optimistic for the newspaper industry!)

Rory Ryan is Senior Editor, North American Desk at Paperitalo Publications. He can be reached by email at

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