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Oracle Hires Global Specialists To Explore Feasibility of Buying Accenture
Paul Kunert writes in an exclusive report via The Register: Oracle has hired global specialists to explore the feasibility of buying multi-billion dollar consultancy Accenture, sources have told us. The database giant has engaged a team of consultants to conduct due diligence to "explore the synergies that could be created if they [Oracle] bought Accenture lock stock and barrel," one source claimed. On top of the financial considerations, the consultants are evaluating the pros and cons including the potential impact on Oracle's wider channel. "While these things have a habit of fizzling out there are some fairly serious players around the table," a contact added. Another claimed the process was at an early stage. "If buying Accenture was a 100 meter race, Oracle is at the 10 to 15 meter stage now." [T]his buy would be an immensely bold, complicated and pricey move: NYSE-listed Accenture has a market cap of $77.5 billion, and shareholders will expect a premium offer. A deal would dwarf Oracle's $10 billion buy of PeopleSoft, its $7.4 billion deal for Sun Microsystems, and more recently, the $9.3 billion splashed on Netsuite. In buying Accenture, Oracle would be taking a leaf out of the mid-noughties handbook - when HP fatefully bought EDS and IBM acquired PWC to carve out a brighter future.
In the world of business executives, they've formalized "synergy" as having a real meaning - how can we use the excuse of merging facilities and people in such a way that we can justify cutting costs far deeper than what will support our current contracts or future business, in order to shore up stock prices int he short term (and collect out golden parachutes when it collapses... and after we've cashed out our own stock, of course).
See: HPE spinning off former EDSers and the remainder of their enterprise folks to CSC in the form of "DXC Technology" - a company already stripped to the bone, driven by "synergies" and after the "spin-merge" is completed on April 1 (great day for it), they'll commence even more reductions in their workforce and more replacement of skilled, experienced labor in favor of recent college graduates (who will probably only stay for a year or two anyway). Oddly enough, these massive cuts to the rank-and-file workers is never accompanied by a similar slaughter of the upper-level management (which only becomes even more lop-sided)
Basically, the moment two companies talk about a merger and "synergies", it is the start of the downward spiral for both (or at least formal acknowledgment).