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Over the last several years, we have seen numerous mergers of hotel organizations in what was widely touted as a period of significant consolidation in the US hotel industry. Driven by inexpensive acquisition capitalfrequently the result of the frothy pricing of hotel stocks on Wall Streetthe "urge to merge" was close to a fever pitch in late 1997 and early 1998. Since then, Wall Street has adjusted its view of the hotel sector and our industry's leaders have ever since focused on getting their enterprises to produce the results their shareholders have come to expect. This year1999the run-up to the new Millennium, will in all likelihood become known as the year when the M&A deal makers finally deferred to their hotel operating brethren to "get it together" and figure out ways of putting the requisite results on the table or in the beds as it were. And probably none to soon. Big companies have become biggerbut have they become better? A question of some relevance to the various stakeholders with an interest in what happens at some of our leading companies. Post merger integration is one area of particular importance in ensuring that the synergies promised by the deal makers are in fact delivered after the closing. There is some evidence however to suggest that the benefits of merging companies can be quite elusive. One recent study of post-merger results suggested in fact that approximately one half of merged entities under-performed their industry rivals following the merger. After having witnessed a flurry of mergers in the hotel industry in recent years, there are a number of lessons that we might take note of. And to simplify the message, the issues are summarized in the listing that followsa road map of sorts for ensuring you can beat the odds on post merger integration success... To read the complete article, click here to download the printable pdf file (56 kb).
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