How The Business Deals In Succession Actually Work

The Intricacies of Mergers and Acquisitions

In the hit TV show "Succession," the character Kendall Roy is on a mission to acquire a tech-focused media company called Vaulter. This deal is a classic example of a common business activity known as mergers and acquisitions. But what exactly does that entail?

At its core, a merger or acquisition involves one company purchasing another company. This can happen in various ways, such as through an exchange of cash or stock. The acquiring company then takes control of the acquired company's assets and operations, integrating them into their own business to generate more revenue.

Types of Mergers and Acquisitions

There are different types of mergers and acquisitions that businesses may pursue. One type is a merger, where two companies of similar size join forces to create a more powerful entity. This can be done for various reasons, such as horizontal mergers, where a company merges with a supplier or customer, or vertical mergers, where a company merges with a media producer to offer their own programming and increase revenue.

However, it's important to note that obtaining approval for a horizontal merger can be quite challenging, especially in industries like media, where regulatory bodies may oppose mergers that could result in a monopoly and stifle competition.

The Complexities of Merging

Mergers and acquisitions come with a myriad of considerations and challenges. One of the key decisions to be made is determining the management structure of the combined company. This includes selecting which CEO to retain and who will sit on the board of directors.

Another important aspect is branding. When two companies merge, they need to create a new identity for their combined entity. This often involves coming up with a new name, which can be a creative process involving the combination of the merging companies' names.

Examples of companies that have undergone significant mergers include DaimlerChrysler and ExxonMobil. In "Succession," the fictional company Waystar Royco is no stranger to the acquisition game, as the show delves into the complexities of family-driven corporate maneuvering.

Power Struggles and Shareholder Control

In the show, the Roy family's ownership of Waystar Royco, a publicly listed company, gives them significant power and control over shareholder votes. They can influence these votes through a trustee company, which allows them to shape the future of the business.

However, it's important to note that even though the Roy family has a firm grip on the company, they also have a fiduciary duty to act in the best interest of their shareholders. This means they must balance their personal ambitions with the needs and desires of the shareholders.

Furthermore, the family's control of the company is not absolute. If the stock's value plummets, a margin call could be triggered, putting their ownership and control at risk. Additionally, they could be vulnerable to being bought out by a larger company, which would result in a loss of control.

"Succession" and the Realities of Mergers and Acquisitions

While "Succession" is a fictional portrayal of the business world, it offers valuable insights into the strategies, challenges, and potential consequences involved in mergers and acquisitions.

The show highlights the cutthroat nature of the business world, where companies will go to great lengths to gain a competitive edge. It also showcases the power struggles that can arise within wealthy and influential families who are fighting for control of their businesses.

As viewers navigate the complex web of family drama and corporate finance in "Succession," it's important to remember that the show may not accurately represent real-life business dealings and dynamics. However, it does provide an entertaining and thought-provoking look into the challenges faced by companies and the individuals who run them.

So, whether you're interested in the inner workings of the media industry or simply enjoy well-written and well-acted drama, "Succession" is definitely worth a watch. Play it smart and give this show a chance – it might just change the way you look at family drama forever.