Albany International/Geschmay Group Merger

22 Pages Posted: 21 Oct 2008

See all articles by Margaret Cording

Margaret Cording

University of Virginia - Darden School of Business

L. J. Bourgeois

University of Virginia - Darden School of Business

Anna Moscoso

University of Virginia - Darden School of Business

Abstract

Albany International, a New-York-based paper machine clothing (PMC) manufacturer, has overpaid to acquire Geschmay Group. Its paper manufacturer customers have been consolidating quickly, forcing PMC companies to do the same. Not only are the corporate and national cultures of the two firms different, but Geschmay is multicultural and poorly integrated. Albany International management must decide which plant to close in France, where the merger resulted in redundant facilities; meanwhile, French law and French culture makes it nearly impossible to move people between plants.

Excerpt

UVA-BP-0428

Rev. Jan. 7, 2013

ALBANY INTERNATIONAL/GESCHMAY GROUP MERGER

The winter of 2000 was a very tense time for Albany's French operations.

—Jean Senellart of Albany International

It was December 16, 1999, four months after Albany International's acquisition of the Geschmay Group, when Chairman and CEO Frank McKone and Senior Vice President in charge of Europe Bill McCarthy reviewed the capacity analysis of the new company's European facilities. Albany International, world leader in manufacturing paper-machine clothing, faced overcapacity in Europe, negative stock-market reaction to the dilutive merger, a pressing need to generate the promised synergies, and limited investment capital. Now, the three executives had a tough decision to make: as part of an earlier 1998 cost-reduction program, Albany International had determined it might be necessary to close the company's plant in Riberac, France. The Geschmay acquisition, however, presented an alternative. In either case, the decision was wrenching because Albany International executives were proud of its culture of long-term employment and stable operating environment.

. . .

Keywords: Mergers and acquisitions, acquisitions, corporate strategy, industry evolution, strategy implementation

Suggested Citation

Cording, Margaret and Bourgeois, L. Jay and Moscoso, Anna, Albany International/Geschmay Group Merger. Darden Case No. UVA-BP-0428, Available at SSRN: https://ssrn.com/abstract=907923 or http://dx.doi.org/10.2139/ssrn.907923

Margaret Cording

University of Virginia - Darden School of Business

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

L. Jay Bourgeois (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924 -4833 (Phone)

HOME PAGE: http://www.darden.virginia.edu/faculty/bourgeois.htm

Anna Moscoso

University of Virginia - Darden School of Business

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
164
Abstract Views
2,835
Rank
327,446
PlumX Metrics