The truth about synergies

I watched an interview at lunchtime today on the BBC News channel where Roger Carr, chairman of Cadbury, was being asked a number of questions concerning his company’s position as it confronts a hostile takeover bid by Kraft Foods.

Towards the conclusion of the interview, Carr said something most interesting in response to a question by interviewer Simon Jack about expected synergies if Kraft succeeds:

Synergies is a euphemism for heavy cost cuts.

That’s probably what anyone who’s been through synergies following an acquisition has experienced, whether hostile or otherwise.

I certainly have, in a previous life. And I’ve lost count of how many times I’ve used the word ‘synergies’ when writing press releases and executing other communication to suggest the positiveness of a new combination and the great things that are expected as a result and especially because of synergies, with nary a glimmer of anything to suggest a different reality.

That reality nearly always does involve cuts, not only financial but also people. I don’t think you should be surprised at such an eventuality when two or more firms comes together. I just wish there were greater corporate honesty about what to really expect.

Whether or not Kraft succeeds, and whether or not their doing so may result in ‘synergies,’ I applaud Mr Carr’s honesty. I hope his shareholders and employees appreciate it.

Neville Hobson

Social Strategist, Communicator, Writer, and Podcaster with a curiosity for tech and how people use it. Believer in an Internet for everyone. Early adopter (and leaver) and experimenter with social media. Occasional test pilot of shiny new objects. Avid tea drinker.

  1. Najchapman

    Too true.it’s just the same when companies talk about high-grading;it’s time to polish up the resume.

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