Big Deal - Mergers & Acquisitions in the Digital Age by Bruce Wasserstein

For some time, I have been searching for a book that gives a good overview on the mergers and acquisitions (M&A) activity in business. For me, it is out of professional interest and the curiosity in understanding how the real big deals are being done in the US and beyond. Bruce Wasserstein's "Big Deal: Mergers & Acquisitions in the Digital Age" will not disappoint. The writer of the book, Bruce Wasserstein is a practitioner of mergers and acquisitions in Wall Street and have facilitated many big and interesting deals and is currently the CEO and Chairman of Lazard LLC. In fact, it was through a gathering among my business partners that I discovered the book. While on a business trip to Indonesia, I spent some time reading the book and learned a lot about a business which I have interests into. It is definitely a few notches better than the book "Barbarians at the Gate"; which was recommended to me by people involved in M&A activity. For those who wanted a good guide on how M&A have evolved over the past few centuries, good case studies on the strategic challenge in the M&A world, and a guide for those who are involved in the business, this is definitely the book that you must read. I will talk a bit more about the themes that revolve around the book as I move along.

The way you can read this book is to treat it as a M&A 101. The book is broken into the three parts. The first part deals with the history of M&A activity which dated back to the 19th century and how it evolved till today. Wasserstein made a lot of effort to consolidate the different case studies and the profile of the characters involved in each big case. While "Barbarians at the Gate" stressed on the takeover of RJR Nabisco, the book collected other interesting cases for example, the acquisition of the Radio Corporation of America and how JP Morgan facilitated the restructuring of the railroads in the early 20th century. In each chapter of the first part, Wasserstein weaved in general principles in the M&A industry: (i) the basic ideas of pyramids holding company, (ii) the different variations of leveraged buyouts that has evolved over the years, and (iii) the merits and problems in M&A on the economy as a whole.

The second part of the book concerns the strategic challenge of M&A activity. In this part of the book, the author discusses the corporate strategies proposed by Mckinsey, Boston Consulting Group, Michael Porter and Hamel & Prahalad and how that applies to the various industries, for example, energy, automobile, biotech and etc. That concludes with the final section for the guide to the players on the process of translating a strategic concept into a successful executed deal. Of course, in that section, the author asked the reader to be aware of boom and bust in the economy cycles. He also provide a basic list for the reader to evaluate a deal. Instead of telling the reader to follow a recipe with particular issues on what drives a business. The first rule, according to him, is that before leaping into evaluation of the company, one should know the context of the merger. Why are you making that purchase? Once that reason is established, the rest of the criteria will come into play.

I will highly recommend this book for those who are considering rapid growth strategies for their companies via mergers and acquisitions and the insights of this book will change the way on how you think about the valuation of a company and the strategic choice you need to make.

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