Southwest, Aa Not Worried About A New Us Airways

[usair_begins_with_u]

It's a fact: most business acquisitions and mergers fail. Management desires the gains that consolidation and economies of scale should bring, but in fact the great majority of M&As-across all industries-do not live up to their promises. On paper, two plus two should equal five. In fact, two plus two usually equals three. This has been conclusively shown by dozens of studies covering hundreds of companies across all industries.

http://knowledge.wharton.upenn.edu/index.c...37&specialId=30

 

[eolesen]

Depends on how you look at the end result... Many "mergers" are simply a buyout intended to eliminate a competitor. If you can't beat 'em, buy 'em....

Yes, the upfront expense is costly, but my jaded opinion is that a break even proposition with a more predictable outcome is still a better option than engaging in a pricing war over a somewhat finite number of customers and markets...

Everything above assumes that one or both partners are solvent beyond a reasonable doubt. If one is insolvent and the other is teetering on the edge of solvency, the success rates are quite small. My view is that attempting "two one-legged men" type mergers is like trying to charge a dead car battery with another car battery -- you wind up ruining an otherwise perfectly good battery...