Monday, October 6, 2014

Hewlett-Packard and slices of pizza!

It is interesting to read the announcement on the split of yet another tech giant, Hewlett-Packard, coming shortly after the breakup of eBay and Paypal. Every time I read announcements on mergers and de-mergers, the image of a large pizza with different toppings on each slice comes to mind.


(Image link)

It is also interesting to note the spin with announcement of mergers and demergers.  When companies, producing different products or services merge, announcements highlight “synergies” in the “value enhancing move.”  And when a company like - Hewlett-Packard announces a demerger, it is yet another value- enhancing move that allows us to “invest in the respective asset groups without the fear of cross- subsidies and inefficiencies” (link)
 
The impact on people, employees and stakeholders including customers, who are left to manage the change - management speak for those left catching the falling knife – from such de-mergers, has been studied ad infinitum. And so has the impact on the groups of people who benefit from mergers and demergers: shareholders and investors, lawyers and consultants.
 
The footnote in the analysis of Hewlett-Packard’s Value enhancing move Planned job cuts will increase to 55,000 and costs to restructure cost will be about $600 million.” made me wonder: $600 million to slice a corporate pizza?!