A BELIEF arose in Europe in the mid-1960s that the best way to fight the competitive challenge of U.S.-owned multinational firms was to create giant European companies capable of competing on a world scale. In Britain, France, Italy and to a lesser degree West Germany, governments encouraged such mergers, sometimes acting as a marriage broker. Today the European merger movement is running into deep trouble.
Too often weak managements merely compounded their problems by enlarging them. Further, many of the mergers were on a 50-50 basis, giving neither side control. National policies often required the merged companies to continue unprofitable operations...
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