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3 Laws Will Determine if InBev Deal a Winner Says ‘Remix Strategy’ Author

10/10/15 10:00 AM EDT
Remixes in music are common when artists want to explore new styles. On Wall Street, the remixing of assets through mergers and creative alliances helps companies expand by introducing new ideas, said Benjamin Gomes-Casseres, author of Remix Strategy. 'Remix is the process of taking assets from outside your company capabilities and mixing them and combining them with your own,' said Gomes-Casseres, who is also a professor at the International Business School at Brandeis University. Gomes-Casseres offers three laws in his book to maximize the success of a strategic combination. His first law states: 'The value created by the combination should exceed the total value that would be generated by the players acting alone.' Or, in other words, trying to make 1+1=3. Of course, Gomes-Casseres recognizes it’s not always easy to calculate a merger’s synergies in advance no matter how the investment bankers pitch the deal. 'Look at InBev (BUD) and SABMiller (SBMRY) right now,' said Gomes-Casseres. 'Do we know that they are going to create value by coming together? It’s like two Sumo wrestlers trying to hug each other.' Watch the video to get the other two laws in Gomes-Casseres' strategy.
Stocks in this video: BUDSBMRY
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