The merger that can't be ignored

The huge merger looming on the horizon is causing finance directors much unease. So it should. Many doubt the wisdom of such mega-mergers, fear the culture-clash that goes with them, and wonder whether they haven’t got much more to do with egos and power-politics.

Signals from the British government are currently confusing, while our European counterparts have yet to decide exactly how much mega-merging to allow. There is even some doubt as to whether the amalgamation will survive the vote in the UK. Others say that such huge agglomerations well suit the tiny handful of supremely huge global corporations (of which the FTSE-100 index is probably blessed with no more than 30) while the rest might bear the burden but see little of the real benefits of mega-merging.

There are FDs who claim they never thought it would happen. Others claim that, though such a move was likely, it was not going to affect them.

Either way, vast swathes of British industry have neglected to prepare, to plan or to think ahead.

This is a great industrial calamity, really, because the merging of many European currencies into one is the most significant event to strike the commercial landscape since Bretton Woods. (You did realise we were talking about Emu, didn’t you, and not that relatively unimportant coming together of a bunch of auditors?)

Far too many UK FDs have failed so far to treat the euro as anything other than a treasurer’s little crisis or an accounting/bookkeeping matter.

The reality is that it will affect your product pricing, your marketing, your continental export markets, your investment decisions, your budgeting process, your contract tendering procedures, your bank (is it ready for the euro?) and, yes, your accounting software systems.

Most importantly, it will affect your competitors – and many of them are much more advanced in their thinking about the euro than many of you. [HH] Appointment at theh London International Group. [PP] 6 [PL] UK

David Davies has been appointed to the board of the London International Group, manufacturers of Durex condoms and Marigold household gloves. He joins as finance director in waiting until the present FD James Tyrrell (who is profiled in this month’s issue, see page 16) moves aside on 30 November. Tyrrell, who earned a basic salary of #203,000 and a bonus of #60,000 last year, will remain as an executive director until his planned retirement in August 1998. Davies joins from The Disney Store, Europe, where he was vice president of finance and market development. He previously held senior positions at the BOC Group and Grand Metropolitan. He trained as a chartered accountant with Touche Ross.