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This Blog summarizes five articles originally published in WRAL Techwire in June and July 2019
We Love mysteries!
Each twist and turn makes solving the mystery more challenging and we love challenges.
But most of our clients don’t want THEIR deals to be mysteries. Clients want to know what is going to happen each step of the deal.
This combination of what we like to do and our clients’ need to feel secure helped us to develop our skills at analyzing and explaining each step of the process that leads to a successful deal closing.
Recently, we employed that skillset to explain to readers of WRAL Techwire the twists and turns of the Red Hat-IBM merger.
The merger recently closed, but not before a lot of twists and turns and speculation along the way.
WRAL Techwire afforded us the opportunity to provide play-by-play commentary (like for a football game on TV) to explain:
- what was happening and
- why and
- what was likely to happen next.
It was fun.
Many people fault lawyers for being too risk adverse about predictions. We like to think we are different – like trapeze artists who perform in the circus without wires or a net. We think making definitive public statements in real time as events are happening are good examples of that difference.
You be the judge of what the public record shows about how we perform in a series of five articles over a two-week period.
Here’s our commentary on June 26th about several aspects of the merger, including the international antitrust approval process and to hundreds of Red Hat employees becoming millionaires who won the lottery what is likely to happen when they do. Who will take the money and run to pursue other dreams? Who will stay to continue building the business? The answers to these questions will determine whether the merger achieves the business goals IBM and Red Hat have. How will employee decisions affect our community?
Mergers are a lot like reality TV shows. There are winners and losers. The employees are real people whose lives may change radically. Some will benefit. Others will be hurt. Everyone wants to know which camp they will be in. So, on June 27th we talked about the synergies the merger is meant to achieve, why IBM needs to resist the temptation to mold Red Hat into IBM’s image and why Red Hat employees are too valuable to fire to achieve quick cost reductions.
Every mystery needs an unexpected plot twist. In this merger, it was Brazilian regulators who initially approved the merger, but at the last minute withdrew their approval. See out June 28th analysis of this last minute surprise and why Red Had and IBM were free to close their merger and deal with Brazil late r(which is what they did).
Often the big drama of any deal is hidden behind closed doors. We are often behind those closed doors participating in decision-making and implementation. On June 29th, we explained to WRAL Techwire readers what often goes on behind the curtain when two merger partners begin talking steps to implement their post-merger strategy.
Finally, we reached a happy ending to the mystery with the merger closing. But the closing is only the end of Act I in this drama. One July 9th, we analyzed the likely next scenes in the ongoing Red Hat/IBM drama.
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|Jim Verdonik||Benji Jones|
© 2019 Innovate Capital Law (Verdonik & Jones, PLLC) For further information regarding the issues described above, please contact us.
This article is not intended to give, and should not be relied upon for, legal advice in any particular circumstance or fact situation. No action should be taken in reliance upon the information contained in this article without obtaining the advice of an attorney.