One of the driving forces of the merger from the day our companies began talking has been the
fact that the combined company could operate much more efficiently than either company
alone. Newco will have one board of directors, one executive staff and for example, one sales
office in Munich, rather than two of each. Companies ordinarily describe the efficiencies to be
achieved in a merger by reporting “synergies” to their shareholders, as we will do. That
discussion with shareholders started even before we began planning the merging (integrating)
of our two companies. In our travels to present the merger to investors, John Kispert and I told
them that we expected to save $135 million annually from the synergies created by integrating
the companies; that is, by reducing from two to one in as many areas as possible. In some
areas, cutting cost in half is impossible. The buildings that house Newco will be larger and more
expensive than the buildings of either of the companies today, but smaller and cheaper than our
current buildings combined. The salesforce will also be bigger than either of the current
salesforces. Since our businesses do not overlap (a good thing), we will also need two
technology groups, two design groups, etc. (That last statement is for illustrative purposes. In
reality, we will have 19 design groups in the combined corporation.)
One of the driving forces of the merger from the day our companies began talking has been the
fact that the combined company could operate much more efficiently than either company
alone. Newco will have one board of directors, one executive staff and for example, one sales
office in Munich, rather than two of each. Companies ordinarily describe the efficiencies to be
achieved in a merger by reporting “synergies” to their shareholders, as we will do. That
discussion with shareholders started even before we began planning the merging (integrating)
of our two companies. In our travels to present the merger to investors, John Kispert and I told
them that we expected to save $135 million annually from the synergies created by integrating
the companies; that is, by reducing from two to one in as many areas as possible. In some
areas, cutting cost in half is impossible. The buildings that house Newco will be larger and more
expensive than the buildings of either of the companies today, but smaller and cheaper than our
current buildings combined. The salesforce will also be bigger than either of the current
salesforces. Since our businesses do not overlap (a good thing), we will also need two
technology groups, two design groups, etc. (That last statement is for illustrative purposes. In
reality, we will have 19 design groups in the combined corporation.)
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