Which cities were the biggest winners and losers to company mergers and acquisitions (insurance, employment)
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All the commotion about where Amazon will move and cities all over the US in full competition mode got me interested in the various mergers and buyouts than happened mostly in the 80's ad 90's thanks to the weakening of anti-trust laws. I'm curious to know which cities today came out has the biggest winners of this frenzy and sadly which ones were the biggest losers.
Mergers & Acquisitions tend to happen everywhere and can affect everywhere, so the politically correct answer would be anywhere and everywhere.
HOWEVER, generally the cities that tend to make off like bandits with M&A processes are the cities that are the focal point for an entire industry. M&A becomes a regular and standard process during a downturn or recession for any given industry (just as splits and spinoffs are generally accustomed to a time period when the industry is rapidly expanding and/or booming). For example, during the Great Recession, many of the banking institutions that folded or were acquired were done so by banks and institutions in New York. This re-alignment of power made New York an even stronger financial market when the recovery process after the recession began but it also weakened major banking centers elsewhere that may or may not have previously been nipping at New York's banking heels. Charlotte in particular weakened as a banking town during the recession, the gap between it and New York widened several fold.
Another example is the aviation industry. Over the last maybe 2 decades there has been serious realignment in the industry as major airlines were bought out or merged with larger ones. For example, when Delta acquired Northwest Airlines, the merger effectively ended Minneapolis' role as a major headquarters to a major American airliner. Delta was the larger, more resourceful, more global airlines so when it acquired Northwest, Northwest effectively ceased to exist afterwards and a lot of the operations based in its headquarters were shuttered and/or relocated to Atlanta where Delta was based. Same thing happened when United Airlines merged with Continental and when American Airlines merged with U.S. Airways.
About 3 years ago there was a major oil and gas downturn and the M&A's tended to benefit Houston, which is the epicenter of the industry in the United States. It came at the expense of Oklahoma City, Tulsa, or even Denver as some of them had energy companies that were acquired by the larger and more resourceful ones in Houston and it either downsized or ceased their operations afterwards in their original markets after consolidation into Houston's market.
Same thing happened during the mid-2000s following the Dot Com bust in the tech industry. The bust hurt everyone but it hurt bit players even more than it hurt Silicon Valley as Silicon Valley companies took that opportunity during the downturn to go shopping and buy out competitors in other markets outside of the San Francisco Bay Area. If there were a tech bust today, while it would hurt all of the tech markets, it would hurt the bit players way more than it would hurt the San Francisco Bay Area as Silicon Valley would use M&A's to decimate rivals or to transition into their next generation portfolio.
So in sum, M&A's generally are worse for cities that aren't the focal point of an industry as they are more vulnerable to M&As than places that are the focal point of that industry. The difference may stem from the infrastructure, capital flow, resources, talent pool, employment numbers, and sheer notoriety. There are plus sides and downsides to being the epicenter of an industry, however when it comes to M&As, being the epicenter of an industry during a large scale M&A process is generally very beneficial. Very beneficial as it puts a place (potentially) at the forefront of a monopolization process of an entire segment of the economic market.
Last edited by Trafalgar Law; 10-20-2017 at 02:12 PM..
Baltimore and the State of Maryland got the short end of the stick. The state was poached of it's independent companies every which way. That's why Baltimore has no Fortune 500s and Maryland only has four Fortune 500s as compared to 20+ in surrounding and direct competing states (except for Delaware and West Virginia).
The metro came in #1 in the country for the forth year in a row for new and expanding corporate locations. In 2016 over 350 business expansions and relocations happened in the area - a huge number of them in the city itself. Especially for headquarters relocations, almost all are within the city.
Generally speaking, most of the prominent big cities were winners - the losers were small cities. It's become cliche now to hear about large employers or companies packing up and leaving smaller cities/towns and going to the bigger cities where they feel they can find a better workforce.
The metro came in #1 in the country for the forth year in a row for new and expanding corporate locations. In 2016 over 350 business expansions and relocations happened in the area - a huge number of them in the city itself. Especially for headquarters relocations, almost all are within the city.
The Boeing one a few years ago was huge.
More recently, Caterpillar moved up to Chicago from Peoria.
More recently, Caterpillar moved up to Chicago from Peoria.
Over 50 companies have moved their headquarters downtown in the past 10 years from the suburbs alone, with dozens more from out of the region.
McDonalds
Caterpillar
ConAgra
United Airlines
Motorola Solutions
Kraft-Heinz
Hilshire Brands
Wilson Sporting Goods
Dyson
Home Chef
Beam Suntory
Mars Wrigley
The first city that comes to my mind is Hartford, and its contraction after insurance companies left for bigger ponds.
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