Social mergers and acquisitions

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Social mergers and acquisitions

By Tony Samson

IN corporate mergers and acquisitions, “due diligence” is a must. It is a process that determines the value of a company. Aside from the usual financial analysis based on accessible data, there is the search for hidden risks like litigation, assets that are overvalued or booked items being occupied by the sellers of the company, like the family home. Accountants, lawyers, credit rating agencies, banks, and auditors together arrive at a valuation that determines the real worth of the company. This due diligence does not include that unquantifiable entry simply called “goodwill,” which the seller adds without any supporting data — the brand equity is priceless.

In social mergers and acquisitions, more commonly known as marriages or partnerships, is due diligence also applicable? Dynastic families with comparable net worth move in the same circles and very early in the lives of their progenies, parents already plan mutually favorable pairing arrangements. Even here, fortunes may change, as family-owned conglomerates are gobbled up by politically well-connected upstarts from the South, so valuations need to be revised. What are the real assets left with the family?

With social media, old barriers have fallen, making entry into once sacrosanct enclaves more porous and less protected. The new fortune-hunters, who are also technologically savvy, no longer need to be physically accessible like dance instructors, gym trainers, bar hostesses, or caregivers. They can be Facebook or Viber friends or chat mates who eventually ask for “face time” to meet up. There is the illusion of having known one another a long time, with all the shared profiles and uploaded photos. (She knows his favorite pasta.)

Is there a need to probe further and undertake due diligence on a social level?

One school of thought ascribed to the liberally inclined and more optimistic lot considers past social status and previous entanglements irrelevant. Thus, a single (not legally married) lady in her late twenties, having no current spouse on record, even though living with or without a love child from a previous entanglement, is considered acceptable by the social liberal on an as-is-where-is basis, much like a perfectly running previously owned car. (Her engines are purring.)

It is the presumption of the liberally minded that the current relationship is simply “Day One” of a life together. Any entanglements of either party before the current relationship are considered immaterial, even perhaps with some loose ends as when a former lover still sends text messages — Remember Bora, Babe. Random interruptions of this nature are treated like clothes that no longer fit and still hanging in the closet. They just need to be set aside for pick up by Caritas.

The conservative (outdated) school of thought embraces past history too tightly. The mate wants to know details of past relationships, including the circumstances of the first encounter — what happened after you took off your earrings? A mature girl, now ready to settle down with a slightly younger (closer to her age) and earnest suitor who offers marriage, may be required to offer full disclosure to her new mate. Surprisingly, the corporate jargon for this vetting procedure is: “to open your kimono.”

If she is attractive and in her late twenties, it is safe to assume that she may have had an active lifestyle before. She is inclined to accept the proposal of a moderately satisfactory suitor who does not need to ring all her bells. She just wants a secure life. Still, her previous single life may have involved relationships with much older partners — we used to discuss stoic philosophy, after I shampoo his poodle. What’s the name of the dog? (Which one?)

Digging too deeply into a past life constitutes undue diligence. Let a partner keep her secrets as their original intensities must surely have faded and been replaced with this paler shade of gray. The much too possessive mate’s fault may be an active imagination involving the past relationships of the woman of his dreams.

Too much knowledge about any person’s history can truly be riskier than too little. And so, there’s always the pre-nuptial agreement which removes the issue of wealth and access to it from the table. Such an option though can be contentious as it shows a lack of trust — do you think I’m just after your money? This is a rhetorical question, and it’s best to remember that the one asking (not always female) is not after a nice haircut, either.


Tony Samson is chairman and CEO, TOUCH xda.