Globalization and CSME - Mergers inevitable

Mergers for survival

Nation News - Bridgetown,St. Michael,Barbados

Published on: 10/13/07

THERE'S ABSOLUTELY nothing wrong with company acquisitions or mergers.

In fact, president of the Barbados Private Sector, Ben Arrindell, thinks it's the way to go forward as Barbados continues to battle in a globalised business environment.

"These are acceptable, and very often, necessary processes for stimulating growth in a business and, if properly planned and executed, can be of benefit to shareholders, employees and customers," Arrindell told the opening session of the 8th Annual Private/Public Sector Consultation with Government at Sherbourne Conference Centre yesterday.

The private sector chief noted that the theme of the consultation, Safeguarding The Future; Engendering Global Resilience, had major relevance for Barbados.

He noted that in the face of globalisation and the pending competition from regional and international companies, Barbadian businesses had two options.

"They can continue as is, and try to compete directly with a larger competitor that may have advantage of economies of greater scale and financial resources, or they could grow their businesses through mergers and acquisitions, or entering into joint venture arrangements with other local or regional companies in order to become large and financially strong enough to be able to compete effectively.

"The reality is that with globalisation and the creation of the CSME, mergers, acquisitions and joint ventures are inevitable," Arrindell concluded.

And he noted that in some cases such a move could be the only means available to achieve sustainable growth in businesses.

"I am a firm believer that more of our businesses, large, small, and medium-sized, need to embrace joint venturing as a way to take their business to the next level."

Proper regulations

But the professional accountant warned that a proper regulatory environment would have to be created to ensure that activities took place in a manner that was fair and transparent, and protected the rights of shareholders, employees, and consumers.

Regarding the private sector, Arrindell said his body was still very concerned with many Barbadian products, which were export ready, still not meeting European Union standards.

"We urge the Government to speedily put the necessary framework in place," he added.

Regarding the country's social partnership, he said it needed to be made more effective, and to be rejuvenated so as to continue going forward.