When tech company mergers make sense

www.breakingviews.com

www.breakingviews.com

Mergers among technology companies rightly have a mixed reputation. Many of the companies are relatively light on assets, as patents, research, and especially people make up most of their value. Indeed, merging two technology companies has be compared to smashing together two investment banks. Imposing one culture, or cutting costs, can lead to the best employees walking out the door.

But some tech areas offer better prospects. The best appears to be telecoms equipment makers. Pushing two of these groups together can actually result in savings – the easiest way in which a merger can create value.

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