Booz & Company and A.T. Kearney have officially ended merger talks (for this round, at least). The two officially put a kibosh on things by posting an identical clear and concise message on their respective websites:
Booz & Company and A.T. Kearney confirm that they have ended discussions about a possible merger of their two partnerships. While the two firms greatly respect each other’s legacy and capabilities, they have determined that their future aspirations will be best realized as separate partnerships.
The Wall Street Journal goes into a bit more detail. The merger was to have been a cashless one, where the two partnerships would have combined to create a new entity. However, the fit didn't seem to be as perfect as it was originally thought to be, as Booz CEO Shumeet Banerji discovered as he traveled to meet partners in six countries over the past week to get their feedback on the deal. According to one insider, some partners saw little advantage to the merger since the firms overlap significantly in certain areas, such as operations consulting, and the merger would have required them to share their business and clients—a touchy area for anyone responsible for bringing in his own business.
The Booz-A.T. Kearney merger would have made the company the world's 14th-largest management consultancy and seventh-largest management strategy consultancy (though still smaller than Deloitte, McKinsey and Accenture). That increased size would have better positioned the firm to compete in the global market down the road, but for the moment partners voted against it, preferring to retain power over their individual domains and short-term profits. Shortsighted? Maybe so. But this wasn't the first time Booz and A.T. Kearney considered a marriage, and it might not be the last.
And who knows what will happen next. Rumor mongers have already thrown Deloitte's name into the ring as a possible suitor, following on the firm's announcement last week that it is interested in some large-scale acquisitions in the near future.
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