Most mergers are driven by the notion, sometimes wildly mistaken, that the combination will bring both a competitive advantage. Some pairs of companies, however, seem so intuitively right for one another, no bottom-line considerations should be allowed to interfere with their matrimony. Like an empty rental and a copper thief, these two seem drawn together.
The leader in the mortgage meltdown, Countrywide Financial (NYSE: CFC) managed to leverage its bon-homey, don't-ask-don't-tell lending policies into a corporate disaster. Where, you might ask, can it turn to make lemonade out of these lemons?
To answer this I asked myself, what do people do when the mortgage bill is greater than the sum of their paychecks, savings, hockable goods and child's piggy bank? Usually, when the going gets tough, the tough go drinking. Who, then, would be a better partner for Countrywide than distilling giant Diageo plc (NYSE: DEO)?
The newly dispossessed won't be drinking alone, either. With the CEO selling off his holdings, the SEC reviewing the company's stock option awards, and massive layoffs through the industry, millions of us with a piece of the mortgage business could use a stiff shot of J&B with a Guinness chaser.
Which is where Diageo comes in. As distillers of legendary brands including Smirnoff, Johnnie Walker, Bailey's Irish Cream and Tanqueray, it is perfectly positioned to salve the wounds of the newly homeless or home impoverished. With the extra business sent its way by Countrywide, it will have the cash reserves to buy up shares of a company foundering on Loser Lane.
The Countrywide/Diageo model -- driving customers to drink. Once there, perhaps it could even help customers pay for drinks all the way up to closing time, by financing their bar bills with a 30-year ARBB (adjusted rate bar bill).
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Reader Comments (Page 1 of 1)
10-25-2007 @ 8:10AM
Carl Tapp said...
MY FAVORITE SUGGESTION FOR A MERGER IS :
FED-EX AND UPS AND NAME IT " FEDUPS "
10-25-2007 @ 11:16AM
suitman36 said...
i think a great merger would be of 2 supermarkets.
stop and shop should merge with a&p....creating stop and p
10-25-2007 @ 11:19AM
Tom Barlow said...
Brilliant! Stop 'n P would fit with a post I did yesterday- http://www.bloggingstocks.com/2007/10/24/funny-bidness-the-toilet-restaurant/
10-25-2007 @ 4:29PM
Hanko said...
Your an Idiot!
10-25-2007 @ 5:05PM
David Huston said...
As an owner of Diageo shares. let me be the first to thank you muchly for the concept of joining forces with Countrywide and Leo Mozilo. But, don't be sillyo.