Memo to corporate America: We hate mergers of equals. First of all, we don't believe it. We always know that one company is more equal than another. We know that because we have invested in millions of deals and we have never seen a real merger of equals. No such thing.
Second, not that we are heartless, Scrooge-like curmudgeons, but we actually like it when management outlines who gets kept and who gets cut. We expect it. If you don't give it to us, a la
/Barnett in the first go round, or
American Home Products
last week, we sell 'em both. If you have no plans to slash costs, don't merge. Stay independent.
I thought the MTC-AHP merger was the blueprint of what not to do. Heck, even the headquarters buildings, and both had a ton of different "headquarters," got to stay. No costs taken out whatsoever. The Chicago, Philadelphia, St. Louis and Madison, N.J., offices are all alive and well. Give me a break. How about a Miami office for bad weather days?
To me it looks like the
execs got the MTC blueprint and ran with it. It looks like a loose confederation of states, more like
than a strong, focused new enterprise.
Why do we get these mergers? I wonder whether it isn't ego. Nobody wants to step down. Everybody wants the title. Nobody wants to make the hard choices. Take a look at
, which I am still long. What in the name of %*%*&%I*%(*%(*% is
still doing there? What is that all about? His presence makes me sick. It was his "equal" half that gutted my HFS "half." But the merger-of-equals logic dictates that we, the shareholders, have to keep paying Forbes' salary, even though accountants obviously still can't even get their arms around the old CU's books. Sacrifice this guy, please.
So, corporate chieftains, you want your stock to go up after a merger, give us a clear line of authority, give us some heads, give us some reason to get excited besides an increase in overhead! And can this "equality" stuff, save it for the Constitution.
James J. Cramer is manager of a hedge fund and co-chairman of
At the time of publication the fund was long Wells Fargo, American Home Products, Monsanto and Cendant, though positions can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column by sending a letter to TheStreet.com at