Many Prudential shareholders are relieved at the collapse of the company's attempt to buy the Asian operations of American insurer AIG. The business history of the past two decades is studded with failed mega-mergers. Time Warner gave away half the world's most successful media business for a web portal that proved to be worth almost nothing. Royal Bank of Scotland bid for ABN Amro at the peak of the credit boom and had to be rescued by the state.
Alongside these catastrophes are many smaller disasters. The story of Jean-Marie Messier, the French water company boss who used his shareholders' and customers' money to become a US media tycoon, borders on farce. The destruction of great companies of seemingly unchallengeable stability, such as GEC and Swissair, through inept acquisition strategies can only be rendered as tragedy.
Most of these deals are the product of a style of thought popular in business schools and consultancies. The Great Leader concerns himself with corporate strategy, and remains aloof from ordinary operational matters. He manages a collection of activities as a fund manager manages a collection of stocks. The scope of his vision is the key to success; price is secondary. "This is a strategic acquisition" is a euphemism for "we are paying more than this business is worth".