Well, what a busy month June has turned out to be for the deal makers. In just over four weeks BGI and BlackRock have become BlackRock Global Investors, soon to be known as, erm... BGI? And then, just as the month was drawing to a close Watson Wyatt/Towers Perrin announced they were to become Towers Watson.
I have to say that the second announcement hit most industry commentators out of the blue, and to that end I would like to congratulate both companies for keeping such a huge deal secret for so long. As far as I know not a single journalist managed to get even the slightest hint of what was about to happen until the press release arrived.
So far so good as mergers go. Now there is just the small task of integrating two proud consulting giants.
The same of course goes for BlackRock Global Investors. Apart from now having created the world’s biggest money manager, they too have to fuse two large successful teams and hope the sum adds up to more than its parts.
The ramifications of the BlackRock/BGI deal have been widely discussed, not least by the consulting community and you can read all about it on pages here.
But, the potential fallout from the creation of Towers Watsons has yet to be analysed. However, when money managers merge it is normal for consultants to put them on a watch list. Consultants will want to know if key personnel are going to leave? Will the culture change? How will star performers be tied in? In fact, clients can be told to hold off assigning mandates. So, is the biggest consultant in the world now officially on a watch list?
I have no doubt that all the individuals in each organisation are exactly as intelligent and capable as they were before they were informed of their forced marriage. And arguably there is nothing quite like the threat of competition from new colleagues to motivate those who have slipped into the comfort zone. But at the end of the day either a new company culture must be formed or one culture will dominate the other. There can be no status quo.
And lets not forget that things don’t always go according to plan. Sitting here as an inadvertent shareholder of RBS and the rump of what was once ABN AMRO, I am slightly cautious of empire builders.
Generally you choose one service provider over another for a reason and therefore when that changes you have a right to be suspicious. The problem now is that you have fewer providers to choose from.
