Myers Law of M&A (Mergers and Acquisitions) states:
Six months after a consumer products company is acquired, it starts to fall apart!
Over the years, I’ve been a keen “watcher” of the business world. As such, I’ve had the opportunity to see many patterns that exist. There were too many times when a favorite consumer product company of mine was acquired. Almost inevitably, bad things started to happen to the products that I loved. It usually took about six months for it to happen.
Those observations became the basis for forming “Myers Law of M&A”.
On a recent visit to Whole Foods, I was disappointed by the number of items I was looking for that were out of stock! Perhaps there is a reason for this …
About six months ago, Amazon purchased Whole Foods Markets. Judging from recent news reports, Whole Foods has been hit by Myers Law. A recent headline proclaimed:
‘We can only take so much abuse’: Whole Foods suppliers slam ‘hellacious’ new policies and say rising costs are hurting business
You can read that story here. It states that Whole Foods customers, suppliers, and employees are all in an uproar. As a customer, I wholeheartedly agree!
There are logical reasons for this. The acquiring company looked to purchase a business and, using their expertise, make it more valuable. Many times that involves severe cost cutting efforts. The existing company culture gets trampled. Unfortunately, in doing so, they inevitably ruin many of the things that made that business so appealing!
There is a way to avoid Myers Law of M&A. Acquire the company. Keep your hands off of it. Give it resources to enable it to flourish. Over time, integrate your operations in a way that keeps the acquired business special to those who interact with it.
Do you agree?