Common sense and realism in the world of
British media : Channel Four boss David Abraham
say he will not consider acquiring RTL's "Five"

I say ……

 

This is an interesting article indeed and my take on it is that David Abraham is a wise man indeed.

 

•                   Integrating two businesses successfully requires a level of focus and effort which most companies tend to underestimate, hence the high percentage of failures when it comes to creating value out of an acquisition of a merger.

 

•                   As an industry, the whole world of radio and television are going through challenging times, with a need to re-define their strategy, their target audiences, and the way they will convey the content of their programmes to their audience. They need to re-invent themselves, the solution to their current difficulties and uncertainty does not lie in simply reducing their cost base by deriving possible synergies from a merger or acquisition : size is no guarantee of success and therefore it is difficult to see what Channel 4 would gain from acquiring Five which would only add to the shopping-list of strategic and organisational issues David Abraham needs to address.

 

•                   Evidently RTL must be disappointed at David Abraham’s lack of macho-ego and appetite for “acquisitions for the sake of acquisitions” as Mr Abraham’s wisdom has ended (or certainly postponed) the prospect of disposing of a problem child in their portfolio. Maybe they should have attracted Mr Abraham to lead RTL rather than let him move on to Channel Four !

 

•                   I still think M&A is a fantastic means of achieving a quantum leap in the development of a business, but only when the business case rests on sound reasoning; not for the ego of the CEO, not just to enjoy the thrill of all the media buzz, not so simply become bigger (and more complex), but to create value and gain a durable competitive advantage. All things that David Abraham seems to have understood. So we can be sure that the day David Abraham makes a bid to acquire another company, there will be some real substance in his proposition and that is the sort of M&A I would love to get involved with, as an expert in post-acquisition business integration.