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This unique book tells the story in human as well as management and economic terms of what happened in the Baxter Travenol-American Hospital Supply merger--one of the major corporate mergers of the late 1980s. The author, who was a senior executive at Baxter Travenol when the merger occurred, explores the definition of a strategic merger and presents practical data on the requirements to make a strategic merger successful. Specifically, he analyzes whether the new Baxter is more successful and more valuable than its two predecessor companies would have been on their own, what actions were taken or failed to be taken to contribute to that end, and what megamergers entail for executives, industry, and public policymakers. Based on extraordinary access to Baxter's top management, Cody offers a candid and comprehensive report on what went wrong and what went right, and offers some significant lessons to other companies involved in their own merger activities.
After reviewing briefly the background of the two companies and the health-care industry, the author relates the events of the merger chronologically through the words and perceptions of the key participants. He describes in detail the actual execution of the merger, offering an unusual behind-the-scenes look at the organizational, personnel, compensation, communications, and control issues raised by the merger and its aftermath. He looks at the real impact of the merger on employees and provides an invaluable case study of executive decision-making under pressure. Among the issues explored in depth are the conflicts of culture and management style between the two companies, the reorganization process, the impact of the merger on the changing health-care environment, and the choice of corporate name and identity. Ideal as supplemental reading for courses in management and human resources, this book is also an important resource for consultants and executives who seek an in-depth, balanced account of the corporate merger process in action.
List of contents
Cast of Characters
Prologue
Chronology of Events: March--July 1985
Redefining FriendlyThe Stage Is Set
Flashback
Scene Two: AHS-HCA Action Continues
Deus Ex Machina
The Pieces Click into Place: Setting Up the Conflict Scenes That Follow
The Buck Stops
Where Were You When.?
The Battle of the Media
Behind-the-Scenes Maneuvering
End of the Beginning
Retrospective
Putting Together a New Health Care Giant"Friendly" Gets Defined by Actions and Symbols
The Merger Wheel Continues to Spin
August-October 1985: "Smashing" the Organizations and People Together
The October-November "Player Draft": Selection and Termination of Personnel
Melding Two Companies Together: Conflicts of Culture and Managerial Style
November 25, 1985: The Merger Closes
Emergence of a New Board
Back to Business
Health-Care Environment Continues to Shift as Baxter Strategy Takes Hold
Winners and Losers
Corporate Name and Identity
Portfolio Management: The Strategy of Divestiture
Merger Effects Ripple through International
1986 Results and the September 1986 Second Merger Reorganization
Merger: One Year Later
The Story Ends: A Look Ahead and Some Unanswered Questions
EpilogueLessons for Tomorrow's Corporate World
Mergers and the Eye of the Beholder
Index
About the author
THOMAS G. CODY is now retired from Baxter where he was Vice President for Human Resources and actively participated in its merger with American Hospital Supply. He is a partner in the Washington, D.C. office of Jannotta Bray & Associates, Inc., serves on Boards of Directors, and is currently at work on another book.
