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Slightly tangential thought: My belief is: legislation needs to either make it just as hard to merge two companies as it is to unmerge them, or make it just as

Slightly tangential thought: My belief is: legislation needs to either make it just as hard to merge two companies as it is to unmerge them, or make it just as easy to unmerge two companies as it is to merge them. It's insane to me that for how often companies merge and cause competition issues, we effectively never see the opposite happen. I know there's a ceremonial approval for merging two companies (at least in the US), but it's just impossible to undo or prevent the damage.

deleted 1mo ago
[deleted]
Arainach 1mo ago
> or make it just as easy to unmerge two companies as it is to merge them. [Disclaimer: I work at Google, all words my own and not representative of anyone, etc.] There's no such thing. Let's stick to software since it's what HN knows best, but it's a universal truth. Merging two companies: you take the two sides and they keep running. You probably need some extra accounting work to make sure the mandatory reports from each side get combined, but that's all you have to do. Splitting two companies: oof. If you split ChildCo out of ParentCo: * You need to hire all the roles that weren't part of that organization before (HR, legal, compliance, etc.) * You need to register this new entity in all the countries it operates and/or has employees in * Technologically it's somewhere between messy and impossible. Now you no longer have Google's build stack or monorepo. You have to rewrite everything. You can't just move some VMs to a cloud provider of choice
- codewench 1mo ago
  This is far from impossible, and happens all the time when, for example, a company spins off a subsidiary, or any number of other situations. It's hard isn't really a blocker, it's just saying 'this isn't convenient for us', which is why it would have to be forced by legislation.
  - Arainach 1mo ago
    In none of those two cases is what's being proposed "as easy as a merger" - especially since those companies get to take as much time as they want without any court or law-enforced timeline.
- xahrepap 1mo ago
  I disagree with your premise that I shouldn’t express concern/opinions or point out problems with things that affect me simply because I’m not a trained expert in that thing.
  - Arainach 1mo ago
    "I think that the law should make this happen" without any thought for whether what you're proposing is possible or consistent with the laws of the universe is lazy. This is similar to people who think we should just legislate secure encryption that has law enforcement backdoors. It's not possible, and people demanding it without an understanding of the area they're trying to regulate is lazy and insulting.
    - xahrepap 1mo ago
      I think you should reread my post. My post is making a very specific point that your reaction tells me you get, but aren't applying. Read it more like a poem and less like a proposed bill.
      - airstrike 1mo ago
        It's not really useful to write poems when proposing norms.
- rigrassm 1mo ago
  I suspect a large majority of the issues you brought up with splitting can be addressed by legislation. Off the top of my head, something along the lines of having a mandatory period of time where the company being acquired must be kept separate enough that the merger can be dissolved in a timely manner should it be deemed necessary. How long that window should be would be up for debate but personally I'd argue the window should scale somehow based on things like the valuations of each company involved, headcounts, and maybe even competitive landscape. An example would be requiring both companies to perform a pre-merger assessment to determine positions/roles, technology use and regulatory requirements that must be maintained for a clean separation and creating a plan that gets filed with the relevant agencies to be used if/when the merger needs dissolving. If the time comes that they need to dissolve the merger but they don't maintain that separation, they still have to do it and you slap a fine on them equal to some percentage of that mergers cost to be paid by the parent company. Hell, that idea alone would accomplish both making it harder to merge and easier to dissolve the merger.
  - hammock 1mo ago
    What can’t be solved with legislation?
    - rigrassm 1mo ago
      Lots of shit can't be solved by legislation, what's your point?
    - dylan604 1mo ago
      crime
    - mullingitover 1mo ago
      A malevolent electorate.
  - shimman 1mo ago
    I think a better framing we should ask ourselves is why is the onus on the government to make sure a breakup is clean? Nothing in the constitution guarantees the rights of corporation.
- golem14 1mo ago
  And yet, Bell was split.
  - deleted 1mo ago
    [deleted]
- otterley 1mo ago
  > There's no such thing. Spinning off companies happens all the time.
- NeutralWanted 1mo ago
  I worked at HP in 2015 during it's split into Inc and HPE. I then worked at FireEye during it's split. Fun times.
- toast0 1mo ago
  > Technologically it's somewhere between messy and impossible. Now you no longer have Google's build stack or monorepo. You have to rewrite everything. You can't just move some VMs to a cloud provider of choice You could give a copy to both successors. Probably would want to excise some of the repo on both sides, but build tools for sure would be fine to have a second copy. There's no need to rewrite everything, especially if Parent and Child are barred by court decree from entering overlapping businesses. For things that really need a single corporate owner, you could potentially spin that off as well and have both successors contract from that one or depending on the terms of separation have a joint partnership. Hosting would be messy, yes. But somehow the tech world outside google manages to run systems without Google tools. It would be an adjustment, potentially a large adjustment and take a lot of hours. > You need to hire all the roles that weren't part of that organization before (HR, legal, compliance, etc.) > You need to register this new entity in all the countries it operates and/or has employees in This costs money, people, and time, but it's straight forward. HR and legal would likely need some additional people, but likely you assign the people who work with the spinoff business to the spin off corporation and then back fill as needed.
- alex1138 1mo ago
  I have less sympathy for Facebook/Meta. Zuckerberg is on record as saying IG can hurt us. The Whatsapp co-founder Acton saying "it's time. delete Facebook". The fact Zuckerberg's engineers were apparently specifically asked to merge the backends to make them harder to break up. I have very little sympathy for that specifically. I'm not thrilled with a lot of the things Google has done with (say) Youtube - people LOST THEIR ACCOUNTS because of forcing the link to Google+ - but I don't think it's in the same league Chrome is one of those nebulous areas. If they're dictating web standards they deserve at least an antitrust glance
- tavavex 1mo ago
  But what are you trying to say about the greater argument? The parent had two parts to it - make merging as difficult as unmerging, or make unmerging as easy as merging. While you're right that the wiggle room for making unmerging a lot easier is very constrained, this doesn't say anything about the feasibility of the other part of the 'or' and the actual argument they're putting forward. Unless you're trying to extrapolate this to saying that both these changes are impossible, it just comes off as being pedantic.
- youngtaff 1mo ago
  Companies that spin off separate businesses do this stuff all the time, staff up the new business to fill the gaps, license tech from the parent to the new spinoff etc
- kcexn 1mo ago
  I think most of these problems could be solved through contracts. A contract for purchasing Parent Co.'s HR, legal, and compliance expertise for child co. And a contract for sharing technology infrastructure. The terms and pricing of the contract would likely be strictly regulated to prevent preferential treatment and encourage a clean separation over time. I'm not a lawyer though, so who knows.
vlovich123 1mo ago
You're basically advocating for unscrambling the omelet to be easier. Should be obvious why it's harder to unmix than it is to mix.
- makeitdouble 1mo ago
  Why skip this part ? > legislation needs to either make it just as hard to merge two companies as it is to unmerge them
  - Arainach 1mo ago
    Nothing was skipped - the point is that this is directly analagous to unscrambling an omelet. Separating mixed things is significantly more difficult than mixing them. "The laws says X" doesn't change whether X is possible or not.
    - edgyquant 1mo ago
      It’s quite literally not analogous as breaking up companies has happened a bunch but no one has ever unscrambled an omelet
      - positr0n 1mo ago
        fwiw I thought it was a good analogy. Sure splitting a company is possible and scrambling an omelette is not, but it sure takes a lot more effort to effectively undo entropy. In a merger you can take as long as you want to go from 1. Two separate companies except at the end of the quarter we add their revenue and expenses together in a spreadsheet to transition to 2. One fully integrated organization And usually you are becoming more efficient and saving time and money as you integrate. Splitting a company needs to happen quickly or you'd get all sorts of weird effects where coworkers are ostensibly competitors whilst sharing resources during the transition. And you have to expend a huge amount of effort. Just a couple random complex systems that need to be untangled off the top of my head: physical property and leases, IP space for every IT service you run, multi-year contracts with every vendor from janitorial to SaaS, multi year contracts with customers depending on how the split goes, and of course all the intermingled finances and HR and spreadsheets every company in the world lives on. I'm sure there's thousands more considerations. I agree antitrust is a big problem that needs to be solved. But "it should be the same amount of effort to merge and split a company" is just fantasy.
bpodgursky 1mo ago
My experience is that "split" companies are often split only at the superficial financial level and the behind-the-scenes engineering systems are never actually decoupled, you just have a services agreement where the new company pays the old company to continue providing software. Or vice versa. It's usually pretty ugly and expensive and not the clean win for competition you are thinking about.
condiment 1mo ago
This point of view has more to do with your information diet than it does with reality. Companies un-merge and spin out all the time, for many reasons. Mergers and acquisitions are more interesting because they are often associated with a growth story. We like success. Aswath Damodaran, who teaches corporate finance at NYU Stern, has a bunch of great talks and content about this where he discusses how companies should act their age. When older companies that are no longer paying dividends are moving into a divestiture phase, they restructure and split up. What we are seeing with some of these big tech companies is that they are transitioning from an exciting growth story into an extractive dividend story in a way that's becoming harmful to consumers. That's why we're talking about breaking them up, and thats the line their management will have to walk if they want to maximize the value of the firm to shareholders through the decline.
- tehlike 1mo ago
  I would say google is still in its growth phase, albeit a slower one. Especially with capex spending etc.
  - als0 1mo ago
    Google is the new IBM. All the signs are there.
    - jojobas 1mo ago
      IBM is more than 100 years old, has defined a huge part of how we think about computers, made plenty of its employees and workers of the wider field rich, has sold many businesses it considered distracting, and is still worth $200B+. Anyone saying "IBM" in the sense of "stagnant failure" is delusional.
      - tucnak 1mo ago
        Not to mention they are still at the forefront of materials science and industrial design, and just so happen to manufacture bespoke CPU & server platforms that run circles around all the hyperscalers...
roosterIllusi0n 1mo ago
We stopped this in the 1950s with a 90% federal income tax bracket. CEOs could not make more thab the equivalent of 5mil a year in 2026 dollars. No CEO wanted to merge when it would turn two 5mil a year jobs into one 5mil a year job. Cutting taxes on the rich enabled profiteering by CEOs.
elromulous 1mo ago
I don't necessarily disagree, but in practice it's never as easy. Combing ingredients for a cake is always easier than separating them back out. Getting married is easier than getting divorced. It almost feels like some kind of fundamental law.
sam345 1mo ago
This is an incredibly naive view. It truly is shocking to me that anyone in this day and age with any sense of how business works in the United States or even in any reasonably free economic system would view merhers as prima facie bad or in need of regulation which this comment implies. Are we truly going to submit every merger of any size or type to regulatory review? Oh boy.
KellyCriterion 1mo ago
IIRC, the last real break-up was Standard Oil back then? Since then, anti-cartel laws are written but no more enforced
- helpfulclippy 1mo ago
  AT&T back in the 80s Microsoft almost got it 2000-ish, but that did seem to mark the end of it.
duqbxido33333 1mo ago
Slightly tangential thought: My belief is So is it a thought or a belief? Also it's an immature either way - as a belief and or as a thought. You didn't even rationalize your "belief" so there is nothing for me to relate to, except you are wrong
swed420 1mo ago
> My belief is: legislation needs to either make it just as hard to merge two companies as it is to unmerge them This is a good start, but it needs to be more generalized to also cover a related and overarching problem: Modern Capitalism Is Weirder Than You Think: It also no longer works as advertised https://nymag.com/intelligencer/2022/03/how-asset-managers-have-upended-how-modern-capitalism-works.html https://nymag.com/intelligencer/2022/03/how-asset-managers-h... (https://archive.is/wSmtd https://archive.is/wSmtd)
butlike 1mo ago
Merging implies growth, separation implies decay
cryptonector 1mo ago
> My belief is: legislation needs to either make it just as hard to merge two companies as it is to unmerge them, or make it just as easy to unmerge two companies as it is to merge them. Easy for companies to merge, and... who is going to "unmerge" them when they don't want to? It is easy for them to split up if they want to you know, it's just: they don't want to.
jeanloolz 1mo ago
Very often a demerge comes before an acquisition. Example, a fund could buy a huge group/conglomerate made of various companies, and then sell each companies separately. Each company sold is merged to another group but demerged from its original group.

deleted 1mo ago

[deleted]

Arainach 1mo ago

> or make it just as easy to unmerge two companies as it is to merge them. [Disclaimer: I work at Google, all words my own and not representative of anyone, etc.] There's no such thing. Let's stick to software since it's what HN knows best, but it's a universal truth. Merging two companies: you take the two sides and they keep running. You probably need some extra accounting work to make sure the mandatory reports from each side get combined, but that's all you have to do. Splitting two companies: oof. If you split ChildCo out of ParentCo: * You need to hire all the roles that weren't part of that organization before (HR, legal, compliance, etc.) * You need to register this new entity in all the countries it operates and/or has employees in * Technologically it's somewhere between messy and impossible. Now you no longer have Google's build stack or monorepo. You have to rewrite everything. You can't just move some VMs to a cloud provider of choice

codewench 1mo ago
This is far from impossible, and happens all the time when, for example, a company spins off a subsidiary, or any number of other situations. It's hard isn't really a blocker, it's just saying 'this isn't convenient for us', which is why it would have to be forced by legislation.
- Arainach 1mo ago
  In none of those two cases is what's being proposed "as easy as a merger" - especially since those companies get to take as much time as they want without any court or law-enforced timeline.
xahrepap 1mo ago
I disagree with your premise that I shouldn’t express concern/opinions or point out problems with things that affect me simply because I’m not a trained expert in that thing.
- Arainach 1mo ago
  "I think that the law should make this happen" without any thought for whether what you're proposing is possible or consistent with the laws of the universe is lazy. This is similar to people who think we should just legislate secure encryption that has law enforcement backdoors. It's not possible, and people demanding it without an understanding of the area they're trying to regulate is lazy and insulting.
  - xahrepap 1mo ago
    I think you should reread my post. My post is making a very specific point that your reaction tells me you get, but aren't applying. Read it more like a poem and less like a proposed bill.
    - airstrike 1mo ago
      It's not really useful to write poems when proposing norms.
rigrassm 1mo ago
I suspect a large majority of the issues you brought up with splitting can be addressed by legislation. Off the top of my head, something along the lines of having a mandatory period of time where the company being acquired must be kept separate enough that the merger can be dissolved in a timely manner should it be deemed necessary. How long that window should be would be up for debate but personally I'd argue the window should scale somehow based on things like the valuations of each company involved, headcounts, and maybe even competitive landscape. An example would be requiring both companies to perform a pre-merger assessment to determine positions/roles, technology use and regulatory requirements that must be maintained for a clean separation and creating a plan that gets filed with the relevant agencies to be used if/when the merger needs dissolving. If the time comes that they need to dissolve the merger but they don't maintain that separation, they still have to do it and you slap a fine on them equal to some percentage of that mergers cost to be paid by the parent company. Hell, that idea alone would accomplish both making it harder to merge and easier to dissolve the merger.
- hammock 1mo ago
  What can’t be solved with legislation?
  - rigrassm 1mo ago
    Lots of shit can't be solved by legislation, what's your point?
  - dylan604 1mo ago
    crime
  - mullingitover 1mo ago
    A malevolent electorate.
- shimman 1mo ago
  I think a better framing we should ask ourselves is why is the onus on the government to make sure a breakup is clean? Nothing in the constitution guarantees the rights of corporation.
golem14 1mo ago
And yet, Bell was split.
- deleted 1mo ago
  [deleted]
otterley 1mo ago
> There's no such thing. Spinning off companies happens all the time.
NeutralWanted 1mo ago
I worked at HP in 2015 during it's split into Inc and HPE. I then worked at FireEye during it's split. Fun times.
toast0 1mo ago
> Technologically it's somewhere between messy and impossible. Now you no longer have Google's build stack or monorepo. You have to rewrite everything. You can't just move some VMs to a cloud provider of choice You could give a copy to both successors. Probably would want to excise some of the repo on both sides, but build tools for sure would be fine to have a second copy. There's no need to rewrite everything, especially if Parent and Child are barred by court decree from entering overlapping businesses. For things that really need a single corporate owner, you could potentially spin that off as well and have both successors contract from that one or depending on the terms of separation have a joint partnership. Hosting would be messy, yes. But somehow the tech world outside google manages to run systems without Google tools. It would be an adjustment, potentially a large adjustment and take a lot of hours. > You need to hire all the roles that weren't part of that organization before (HR, legal, compliance, etc.) > You need to register this new entity in all the countries it operates and/or has employees in This costs money, people, and time, but it's straight forward. HR and legal would likely need some additional people, but likely you assign the people who work with the spinoff business to the spin off corporation and then back fill as needed.
alex1138 1mo ago
I have less sympathy for Facebook/Meta. Zuckerberg is on record as saying IG can hurt us. The Whatsapp co-founder Acton saying "it's time. delete Facebook". The fact Zuckerberg's engineers were apparently specifically asked to merge the backends to make them harder to break up. I have very little sympathy for that specifically. I'm not thrilled with a lot of the things Google has done with (say) Youtube - people LOST THEIR ACCOUNTS because of forcing the link to Google+ - but I don't think it's in the same league Chrome is one of those nebulous areas. If they're dictating web standards they deserve at least an antitrust glance
tavavex 1mo ago
But what are you trying to say about the greater argument? The parent had two parts to it - make merging as difficult as unmerging, or make unmerging as easy as merging. While you're right that the wiggle room for making unmerging a lot easier is very constrained, this doesn't say anything about the feasibility of the other part of the 'or' and the actual argument they're putting forward. Unless you're trying to extrapolate this to saying that both these changes are impossible, it just comes off as being pedantic.
youngtaff 1mo ago
Companies that spin off separate businesses do this stuff all the time, staff up the new business to fill the gaps, license tech from the parent to the new spinoff etc
kcexn 1mo ago
I think most of these problems could be solved through contracts. A contract for purchasing Parent Co.'s HR, legal, and compliance expertise for child co. And a contract for sharing technology infrastructure. The terms and pricing of the contract would likely be strictly regulated to prevent preferential treatment and encourage a clean separation over time. I'm not a lawyer though, so who knows.

vlovich123 1mo ago

You're basically advocating for unscrambling the omelet to be easier. Should be obvious why it's harder to unmix than it is to mix.

makeitdouble 1mo ago
Why skip this part ? > legislation needs to either make it just as hard to merge two companies as it is to unmerge them
- Arainach 1mo ago
  Nothing was skipped - the point is that this is directly analagous to unscrambling an omelet. Separating mixed things is significantly more difficult than mixing them. "The laws says X" doesn't change whether X is possible or not.
  - edgyquant 1mo ago
    It’s quite literally not analogous as breaking up companies has happened a bunch but no one has ever unscrambled an omelet
    - positr0n 1mo ago
      fwiw I thought it was a good analogy. Sure splitting a company is possible and scrambling an omelette is not, but it sure takes a lot more effort to effectively undo entropy. In a merger you can take as long as you want to go from 1. Two separate companies except at the end of the quarter we add their revenue and expenses together in a spreadsheet to transition to 2. One fully integrated organization And usually you are becoming more efficient and saving time and money as you integrate. Splitting a company needs to happen quickly or you'd get all sorts of weird effects where coworkers are ostensibly competitors whilst sharing resources during the transition. And you have to expend a huge amount of effort. Just a couple random complex systems that need to be untangled off the top of my head: physical property and leases, IP space for every IT service you run, multi-year contracts with every vendor from janitorial to SaaS, multi year contracts with customers depending on how the split goes, and of course all the intermingled finances and HR and spreadsheets every company in the world lives on. I'm sure there's thousands more considerations. I agree antitrust is a big problem that needs to be solved. But "it should be the same amount of effort to merge and split a company" is just fantasy.

bpodgursky 1mo ago

My experience is that "split" companies are often split only at the superficial financial level and the behind-the-scenes engineering systems are never actually decoupled, you just have a services agreement where the new company pays the old company to continue providing software. Or vice versa. It's usually pretty ugly and expensive and not the clean win for competition you are thinking about.

condiment 1mo ago

This point of view has more to do with your information diet than it does with reality. Companies un-merge and spin out all the time, for many reasons. Mergers and acquisitions are more interesting because they are often associated with a growth story. We like success. Aswath Damodaran, who teaches corporate finance at NYU Stern, has a bunch of great talks and content about this where he discusses how companies should act their age. When older companies that are no longer paying dividends are moving into a divestiture phase, they restructure and split up. What we are seeing with some of these big tech companies is that they are transitioning from an exciting growth story into an extractive dividend story in a way that's becoming harmful to consumers. That's why we're talking about breaking them up, and thats the line their management will have to walk if they want to maximize the value of the firm to shareholders through the decline.

tehlike 1mo ago
I would say google is still in its growth phase, albeit a slower one. Especially with capex spending etc.
- als0 1mo ago
  Google is the new IBM. All the signs are there.
  - jojobas 1mo ago
    IBM is more than 100 years old, has defined a huge part of how we think about computers, made plenty of its employees and workers of the wider field rich, has sold many businesses it considered distracting, and is still worth $200B+. Anyone saying "IBM" in the sense of "stagnant failure" is delusional.
    - tucnak 1mo ago
      Not to mention they are still at the forefront of materials science and industrial design, and just so happen to manufacture bespoke CPU & server platforms that run circles around all the hyperscalers...

roosterIllusi0n 1mo ago

We stopped this in the 1950s with a 90% federal income tax bracket. CEOs could not make more thab the equivalent of 5mil a year in 2026 dollars. No CEO wanted to merge when it would turn two 5mil a year jobs into one 5mil a year job. Cutting taxes on the rich enabled profiteering by CEOs.

elromulous 1mo ago

I don't necessarily disagree, but in practice it's never as easy. Combing ingredients for a cake is always easier than separating them back out. Getting married is easier than getting divorced. It almost feels like some kind of fundamental law.

sam345 1mo ago

This is an incredibly naive view. It truly is shocking to me that anyone in this day and age with any sense of how business works in the United States or even in any reasonably free economic system would view merhers as prima facie bad or in need of regulation which this comment implies. Are we truly going to submit every merger of any size or type to regulatory review? Oh boy.

KellyCriterion 1mo ago

IIRC, the last real break-up was Standard Oil back then? Since then, anti-cartel laws are written but no more enforced

helpfulclippy 1mo ago
AT&T back in the 80s Microsoft almost got it 2000-ish, but that did seem to mark the end of it.

duqbxido33333 1mo ago

Slightly tangential thought: My belief is So is it a thought or a belief? Also it's an immature either way - as a belief and or as a thought. You didn't even rationalize your "belief" so there is nothing for me to relate to, except you are wrong

swed420 1mo ago

> My belief is: legislation needs to either make it just as hard to merge two companies as it is to unmerge them This is a good start, but it needs to be more generalized to also cover a related and overarching problem: Modern Capitalism Is Weirder Than You Think: It also no longer works as advertised https://nymag.com/intelligencer/2022/03/how-asset-managers-have-upended-how-modern-capitalism-works.html https://nymag.com/intelligencer/2022/03/how-asset-managers-h... (https://archive.is/wSmtd https://archive.is/wSmtd)

butlike 1mo ago

Merging implies growth, separation implies decay

cryptonector 1mo ago

> My belief is: legislation needs to either make it just as hard to merge two companies as it is to unmerge them, or make it just as easy to unmerge two companies as it is to merge them. Easy for companies to merge, and... who is going to "unmerge" them when they don't want to? It is easy for them to split up if they want to you know, it's just: they don't want to.

jeanloolz 1mo ago

Very often a demerge comes before an acquisition. Example, a fund could buy a huge group/conglomerate made of various companies, and then sell each companies separately. Each company sold is merged to another group but demerged from its original group.