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Yesterday we laid the groundwork for a major, strategic acquisition of a very attractive, synergistic and complementary property that is geographically contiguous, has plenty of upside and, for the most part, speaks the same language.

In that regard it is worth noting that up-front costs could be largely offset by an almost immediate divestiture of what is basically an independent, free-standing entity within the acquired corporation: Quebec. While not trading at a very high multiple, its sale or spin-off could generate significant equity and rid the new corporate entity of lingering legacy and cultural issues. There are many potential suitors for what is clearly a very attractive property, the most obvious being France, which is still smarting from its loss in the French and Indian Wars and has a high-profile CEO in search of global profile. Other tactical post-merger actions to rationalize high upfront costs abound, but will be discussed at a later date.

I would like also to offer at this juncture, before proceeding further, my thanks to those of you who weighed in so far with your thoughts and alternative suggestions. Some were patently facetious, while others drifted into issues pertaining to execution that must await subsequent installments of this strategic plan.

As always in the pursuit of any focused acquisition discussion, alternate scenarios do suggest themselves. Most notable has been the notion of setting our sights not on our neighbor to the north, but our amigo to the south. In that regard, I hasten to state that, in my opinion, the acquisition of Canada does not preclude the development of plans pertaining to equally intriguing possibilities involving Mexico, the former proprietor of vast segments of our current asset base, including Texas, California and most of the Southwest. In my view, however, one must put the cart before the caballo. Large global corporations get themselves into trouble when they overextend their holdings, as any study of Rome, Britain and Time-Warner (TWX) will tell you. This is not to say that a hemisphere-wide master strategy might not lie somewhere down the road. Right now, however, let us keep our eye on that which can be achieved in the near and intermediate term.

We have already looked at some of the global issues facing the current incarnation the corporation, which is now more than 230 years old and still functioning rather well for a mature organization. Day-to-day leadership of the entity has floundered recently, but as we all know it is difficult to sustain the quality of management over time, and on the bright side we can state with some assurance that the underlying power structure is still rather robust, and the class that operates it firmly entrenched in power regardless of who is sitting in the corner office.

Still, recalcitrant issues exist that would almost instantaneously be addressed by the proposed transaction. On a somewhat more granular level, then, let’s look at just a few:

  • Need to expand customer base/sales territories: The U.S. frontier is a thing of the past. Even the depths of Wyoming, Idaho and Montana are crawling with identical strip malls and high-end boutiques. Look at a map. There’s a lot of Canada up there, most of it in desperate need of consolidation and branding. It is, quite literally, as big as all outdoors; similarly, there are many, many small to midsized urban centers in need of large glass boxes and roads leading to them. The existing corporation has the capital and the know-how to get the job done. All we need is the land and the customer base to justify the expansion, which in our view would be almost instantaneously accretive;
  • Limited natural resources: Once again, the acquisition offers an immediately solution to this problem. Oil is, quite literally, seeping out of the ground up there, and there is a wealth of other minerals, lumber and, of course, wind;
  • Stagnation of culture: Perhaps most disturbing about current trends within the existing corporation is a “been-there, done-that” mentality and a certain calcification of the spirit of adventure, unlimited opportunity and entrepeneurial drive that made us great not only in our own estimation but in the mind of the world as well. This corporation is viewed now — internally and externally — as increasingly insular, hostile to new recruits to the enterprise, and set in its ways. Canada is, in this sense, far more congenial to some of the core cultural issues that once defined us. They have cowboys, for instance; real ones that actually have something to do more with cows that with guitars and funny hats. There are innumerable other existing synergies that speak to the ease with which integration of the acquired party could be effected, including consistencies in language, cuisine and even pop music, where Canadian artists routinely pass themselves off as American without fear of reprisal.

There are other operating gaps in the corporate fabric that this acquistion would address. Lest the benefits be perceived as purely opportunistic or lopsided, however, it must be recognized that the acquiree would benefit from the deal as well. For its part, the acquisition target needs capital, infrastructure and some sense of what to do with the enormous acreage at its disposal with which, frankly, it’s done very little for the several hundred years of its existence. This lag could quite naturally be laid at the feet of its original stewards — the French and British — but the entity has been essentially on its own as a free-standing corporation for quite some time and there’s really no excuse for all that wasted space.

With so many compelling arguments in favor of the potential acquisition, we must at the same time allow that there are also powerful contradictory trends and considerations that must be addressed as well. Before we arrive at a discussion of conceptual execution strategies, then, it is incumbant upon us to do so. 

Next: Roadblocks and other barriers to entry.

You need to factor in the fact that most Canadians think Americans are dumb and stupid in general. Quebec hates Canada but likes America. Canada hates Quebec and wishes that America would just take them. Perhaps the take over should be limited to Quebec.

Posted By Liberty, Seattle, Washington : August 27, 2008 1:39 pm

No mention of the “INDIAN NATION”!

We must not forget the contributions of “NORTH AMERICAN NATIVES”!

They gave the subdivisions of the “CONTINENT” much more than just tobacco and corn; they gave their lives in battle and performed in uniform with “VALOR”!

Would it be impolite to ask the “NATIVES” what they think about “CONSOLLDATION”?

Posted By Bob Shelby Twp. Mi. : August 27, 2008 1:47 pm

Now this is what I call a GOOD satirical yet fanciful article.
It is one of the more entertaining
yet fanciful ideas I have seen lately.

Posted By A. Digiacomo : August 27, 2008 2:10 pm

“Quebec hates Canada but likes America.”

Not sure about that.

Posted By Mark, Toronto : August 27, 2008 2:28 pm

When looking into barriers of acquisition, keep in mind they have a decent number of surplus German tanks fromw WWII.

And at least one modern tank, I’m sure.

Posted By ghost, Denver CO : August 27, 2008 3:31 pm

We’re going to have to go to a “poison pill strategy”. We cannot, at any cost, be governed by right wingnuts, because the first thing you will do is axe our wonderful social benefts like 52 weeks of maternity leave and our costly tax payer funded and sometimes broken down health care.

We will definitely need the majority of voting shares and must be on the board of directors.

Posted By K. Calgary, Canada : August 27, 2008 5:45 pm

You need to factor in the fact that most Canadians think Americans are dumb and stupid in general. Quebec hates Canada but likes America. Canada hates Quebec and wishes that America would just take them. Perhaps the take over should be limited to Quebec.

Posted By Liberty, Seattle, Washington : August 27, 2008 1:39 pm

I was going to argue against the comment you made that Canadians think Americans are dumb, cause I know some pretty smart Americans.

However I just remembered that you elected a moron to the presidency and you did it not once but twice.

That took the wind out of my sails as far as argueing against your comment.

Posted By Jack Hammond Canada : August 27, 2008 8:53 pm

Can we just absorb their holdings without taking on the employees? There will not be any synergy, they don’t like us and we don’t like them. I mean with Socialized Medicine and the accompanying tax burden why would we want them. Buy it up, slash and burn the employees and absorb the natural resources. There won’t be much resistance or any sort of Corporate “Poison Pill” we provide for their defense so it would take much to add them to our portfolio. Now we just need to factor in the cost of “relocating” them all to Mexico…

Posted By Jack, Lancaster, California : August 27, 2008 11:44 pm

They can afford large govt. benefits (socialized medicine and 52-week maturnity leave) because the U.S. essentially provides for their defense (along with Europe’s, I might add). Once the acquisition is complete, we should re-designate the new “employee” positions as “soldiers.” Seems fair to me.

Posted By T, Jville, FL : August 28, 2008 12:05 pm

Nobody should get involved in Quebecistan…lots of laughs but too much trouble for too little value

Posted By susan, former temporary resident of montreal : August 28, 2008 3:55 pm

Needn’t post this, but for next installment consider Britain. I lived in London for a while and was surprised to hear from a friend that he’d rather “be the 51st state than part of the EU!” It would mean entry to a new market, reasonably similar culture, and scads of spin-off oppourtunities.

Posted By Mark Smith, San Antonio, TX : August 28, 2008 8:21 pm

“They can afford large govt. benefits (socialized medicine and 52-week maturnity leave) because the U.S. essentially provides for their defense (along with Europe’s, I might add). Once the acquisition is complete, we should re-designate the new “employee” positions as “soldiers.” Seems fair to me.”

Defense from who, precisely? There is only one large military power with the means, opportunity and potential desire to invade Canada – The United States of America.

You’re like the gangsters who charge the local convenience store for ‘protection’.

Posted By Tim, Toronto, Canada : August 29, 2008 9:32 am

Tim, you sound as if you had heard this particular idea before. As I said at the outset, a friendly merger between equals is always better than a hostile takeover. Having been on the receiving end of both, I can tell you that the effects are often the same, but in the former the boondoggles are a lot better.

Posted By Bing : August 29, 2008 10:26 am

May I suggest as a funding strategy to offset the up-front costs of such a venture: a partial spin-off of what has proven to be the most troublesome portion of both existing entities, the Pacific Coast (California, Oregon, Washington, Hawaii, & British Columbia).

As engines of growth one might look at these divisions as the crown jewels of the combined corporation, however this growth would also attract significantly higher trading multiples than other poorly integrated business units. By retaining a significant ownership stake, we can hold onto some amount of future earnings.

Such a spin-off would take out a large portion of a rather defiant set of junior managers who continually stake out positions contrary to those in the front office. It would rid the corporation of a large proportion of its informal employment & goods procurement issues, and provide an outlet for those employees in other divisions who seem prone to opposing both the current transaction as well as most of the recent front office decisions.

Posted By Vinnie, Los Angeles, CA : August 29, 2008 4:55 pm

I like the fancy corporate verbage but I have no way of imititing it. I think that all the North American countries should merge. Imagine how the beach property on Mexico would skyrocket. The United Countries of North America (UCNA) should adopt Canadas health policies, as well as Vancouvers Drug policies. A rip roaring Canibus trade would give a great boost to the economies of the merging nations, so legalization would be great. The tax revenues from this trade would eat any deficit the countries of the combined merger have. We’d also have a great labor force in Mexico to grow all the great canibus crops we need, as well as new growers in the basements of suburbia US. After the formation of the UCNA, we shouldn’t stop there, we should go ahead and merge with europe and pay off our debt to China. Or we could just subjugate china and give them the bird as far as paying them back. Their back breaking poor communists would probably find that being our slaves wouldn’t be so bad compared to the oppressive regime they now live in. We’d just give them their freedom of speech back and the opportunity to work to towards becoming freedmen. With 1 billion of them that would be an impressive labor force. We won’t call it slavery, we’ll call it freedom servitude, (oxymoron maybe, but the patriot act is just as contradictory.)This will give everyone a role. All the other countries will eventually merge into us and we’ll have ourselves a wonderful new world order subsidized by cannibus and hemp trade worldwide. Worldwide travel will also be easier since we’re all citizens of one earth, which would booste the travel industry the world throughout. Now you can move to Amsterdam as a citizen in both Amsterdam and America, since they are merged. I could go on forever, maybe i’ll have a part two as well.

Posted By Josh, Tucson, Az : August 31, 2008 10:11 pm

Jack at Lancaster. My girlfriend has liver cancer. We pay 300 a month for her insurance, 300 a month for her medication, and 300 a month for her chemotherapy. I hope you don’t get cancer, although I bet health care taxes wouldn’t seem so burdensome if you did. I believe very deeply in capitalism but not with medicine, not with medical care period. Capitalism created a terrible incentive to drug companies to pump out treatments instead of cures. If the government subsidized our healthcare, they would invest in cures simply to cut costs. It’s simply better no matter how u see it.

Posted By Josh, Tucson, Az : August 31, 2008 11:28 pm

Josh in Tuscon,

I am sorry for the plight of your girlfriend and I don’t mean to be insensitive but living in Calimexico we have a VERY large unindigenious population of people who didn’t exactly get here legally. I don’t want to be taxed at 50%+ to pay for their health care. I do not want anyone taking 50% of my success to pay for anything of anyone elses. If I get Cancer and most of us are destined to, then I will use the health care coverage I have and use the rest of whatever monies I have to pay for MY health care. Asking another to shoulder your burden, as insensitive as it may sound is NOT American (but is probably Canadian)and I suggest relocating to a more Healthcare friendly location in the North.

Posted By Jack, Lancaster, California : September 9, 2008 4:47 am

I respect your views Jack, i just wanted to show you that reality is not as simple and easy as ardent capiltalists would like it. And my girlfriend is a tax paying asset, and her healthcare is not a burden but a worthy investment. She works her ass off with liver cancer full time buddy. She pays good taxes and has her whole life. Not to mention that the value of life is more infinitely important than tax relief for you !!!!!!!!

Posted By Josh, Tucson, Az : September 10, 2008 11:05 am

and beware jack, you might be reincarnated into a third world country and then, to quote Everlast, “Then you might really know what its like” to be one of those struggling Mexicans who want the same opportunities we have. Look to the statue of liberty, bring me your hungry your tired ect. Your lack of compassion towards these people is selfish and stunning. I know it sucks that they are a burden to our healthcare system, but try to see the world from their eyes before writing them of so easily.

Posted By Josh, (a Puerto Rican by paternity) Tucson, Az : September 10, 2008 11:20 am

Josh,

I was not asking for Tax Relief my friend, I was merely asking that everyone pay their own way. I am not ready to pin on my Karl Marx lapel pin just yet, thank you very much. I would like to expand a bit on my view on Immigration since I may be reincarnated as a third world country someday. I do not begrudge anyone a better way of life, especially one gained through hard work and following the laws of the land. In my original post I made a clear distinction about those who are currently drawing on California’s over-burdened health care system as being here illegally. I am all for immigration as long as it is done within the confines of our legal system and current immigration laws. We are a Constitutional Republic built on the concept of law and order. You mention the Statue of Liberty, Ellis Island was the LEGAL gateway into a better way, there is no Statue of Liberty and certainly no Ellis island on the California / Mexico border there are no fences to speak of but there is an un-ending stream of illegals pouring into our country.

Posted By Jack, Lancaster, California : September 11, 2008 11:41 pm

Let’s face it, after due diligence, you will discover that what you really want is Alberta, not Canada. If you give Ontario the deals on energy that Canada gave the US, I think Ontario would gladly swap Alberta for, say, Florida. Canada is in desperate need of a warmer colony that takes money with pictures of children playing hockey on it. From the US perspective Florida is a hopeless mess that can’t even run an election. The long term picture is that most of it will be under water anyway. By the time that happens, Toronto will be as warm as St. Pete, so no problem for Ontario in that regard. It is a win-win.

Posted By JR, Waterloo, Iowa : September 12, 2008 11:26 am

Way to go Bing.
A true Corporate American visionary. So, following this lovely corporate theme you’ve so carefully established, lets take a look at how a country, I’m sorry, a corporation, might actually afford this “acquisition”. Well, how about there be a straight out “purchase of shares” or hostile takeover using pure fiscal weight to complete the transaction. I’m sure getting the Fed to print a few more hundred billion wouldnt be an issue, though you might want to ask the Chinese first, or they might dump a few trillion on the market and make you have to raze more forests for something to print on. Then who would want the hyper-inflated currency anyways? How about spending the corporate savings. Oh, right, those were all tied up in the housing debauccle, no worries, just borrow on your great great great grandchildren. I’m sure they wont mind. Or, you could exchange your currency for something that still has marginal appeal at the moment, oil, though converting American Dollars to Euros to purchase said oil will get more and more expensive as hyper-inflation sets in. Well, at least the Board of Directors will have excellent reference for how to set up the mark to market model of financing to cook the books and give potential “investors” a rosey outlook for all the inevitable financial experiences. Sure, I suppose you could sell the natural resources of the occupied, I mean “acquired” entity to help offset the costs of the “acquisition” but I’m not sure the Board of Directors has the qualifications to implement the “acquisition” profitibaly. Perhaps if they were to provide a Balance sheet of the profitability of their most recent “acquisition” in the middle east, it might be easier to get more “investors” excited to be on board.
I might post more on this amusing idea later.
For now, I believe I will head out to enjoy our remarkably unbranded fresh air and natural wilderness, which, with nothing done to it at all, makes it the very nature of your desire.
One final thought. As appealing as it is to be “acquired” by a grossly mismanaged and greatly indebtted “corporation” maybe you should get your sales team to brainstorm up a few ideas as to how to sell it to the proposed “acquisition”.

Eagerly awaiting the sales pitch.
Cheers

Posted By Matt, Ontario, CANADA : September 13, 2008 5:13 pm

Thanks, Matt. It’s amazing to me how somebody could get something and not get it at the same time.

Posted By Bing : September 13, 2008 6:14 pm

You’re right, i don’t get it.
I don’t get the “Black Box” accounting that you use that lets the “corporation” feel like its in a position to make such an “acquisition”.

Keep it up though. This idea is too big to fail!

Posted By Matt, Ontario, CANADA : September 14, 2008 2:06 am

HA HA Take over Canada – Are you serious?

Have you Americans not learning from your failed attempt in Iraq?

This idea is so pathetic is hurts my brain to even think about responding to it…..Instead I think I’ll go watch Wall Street crumble on CNN as a result of its Greed.
Keep up the good work guys!

Posted By Matthew, London, UK : September 15, 2008 5:40 am

Honestly? No, Mr. Snotty. I am NOT serious, not at least about the acquisition of Canada. What I am doing is making a serious point about mergers and acquisitions, capitalism, corporate strategy and yes, war. Good God.

Posted By Bing : September 15, 2008 10:01 am

The takeover has already begun some time ago – the great American Corporations like McDonalds, Wendy’s, GM, Ford, Pontiac, Home Depot, WalMart are already entrenched and filtering $CDN into the US – Banking institutions including Citibank and have already negotiated the North-American Dollar to go up against the Euro, which is now laying in wait to be introduced and maybe soon… But America needs to move faster, as the Chinese are also interested in Canada’s vast oil wealth and have already heavily invested Stock interests of many oil companies…

Posted By Mike, Toronto, Ontario : September 15, 2008 4:21 pm

If you’re not in any hurry, no invasion is needed. Just start with Manitoba.

There are just 1.2 million people in Manitoba. Offer each of them $100,000 in return for Manitoba joining the union. The resulting referendum would pass without any problems.

$120 Billion sounds like a lot, but compared to the cost of say the Iraq invasion – which will result in no new territory for the US – it’s a deal. Manitoba would provide a new area the size of Texas with farming in the south, oil in the south-west, large mines and lots of forestry in the north, and hydro-electricity that already powers part of the US grid. There’s a whole lot of fresh water.

The US would get a major northern port in Churchill – the closest port to the European markets for just about all of the US – just as global warming opens it up year-round. It would have a better claim to the right to use the North-West Passage. Missile defenses could be placed further north – say, at the rocketry range near Churchill.

And since Manitoba would be part of the US, that $120 Billion would be dumped right back into the US economy. There’d even be an even distribution – as a million Manitobans with $100,000 and American citizenship move to warmer climates. Just the thing the housing crisis needs.

Once this happens, other Canadians will want the same deal. With the precedent set and western Canada is cut off from the east, you can pick up a more provinces for a substantial discount. With many former Canadians still having relatives in the remainder, the remainder will join through osmosis.

Posted By Roger Strong, Winnipeg, Manitoba : September 16, 2008 1:36 am

As an American married to a Canadian and living there I can say I am counting the days till the acquisition so that my children can say the pledge at school and learn how not to become a liberal. Canadian’s define themselves as not being American it will be one of the harder things for them to get over when we acquire them :)

Posted By JCP, Toronto, Ontario : September 16, 2008 9:34 pm

Before considering the aquisition of more territory, the USA should dump its Confederate States since they contribute no economic benefit while draining the US treasury. The Confederates–even though they are citizens of the USA–hate the USA and have since their 19th century “War for States Rights.” Just let them go with a handshake and a “You win!” Think of it as a massive corporate lay-off executed to save money.

Posted By Ed B., San Francisco : September 17, 2008 1:04 am

I’m bothered by the inconsistencies of Bing, and a conflicted man is bound to fail in his ideas.

And this is quite a whopper, you bet you have contradictions to address…

On one hand he promotes the ‘corporate acquisition’ of Canada and on the other hand, he condemns the same corporations and wallstreet for their greed and exploitation (refer to “Maybe all this misery is just payback”). If Bing actually expects his ridiculous charismatic movement is going to work, why on Earth does he condemn the same vehicle that drives it? How incoherent.

Furthermore, with the very well-known fact that the United States faces outrageous debt due to its promised social programs, massive recent deficits and now billions in corporate (yes, that word again) bailouts, what makes you think that Canadians, a more debt-conscious people than their southern neighbors are going to simply assume trillions more in liabilities they didn’t create?

If the acquisition doesn’t happen by 2012, when US social reforms take shape, then the strain on the american people FOR the american people will simply silence these pathetic proposals.

Observe your own administrative and financial failures, especially in recent days…and remember this council:
You must learn to manage yourself before you can manage others.

Americans are good people, I have many relatives and friends accross the border. But, I don’t want the issues of their nation.

Posted By Andres, Edmonton, Alberta : September 17, 2008 2:09 am

Considering the instability of the US dollar at this point in time, it’s safe to say that payment would have to occur in EUROs. Would you be borrowing the money from China again? If so, I have to point out that it’s starting to look less like a corporate takeover and more like outright pimping.

Posted By Pipi Douleur, Montreal (Quebec) : September 17, 2008 12:51 pm

I think that there may be a good idea that’s; been ignored in this analysis.

What if we take a look at what happened to the Roman Empire _after_ it had over-extended its reach into Britain? Rome created its own competition and the resentment that lead to its collapse.

If it had never overstretched its capacity to rule, Europe and Rome would undoubtedly be different, but that doesn’t mean that the world would be significantly better or worse today.

Romes’ short term success has been taken as a model for justifying military aggression. I propose that it should be viewed as an example of how irrational ambition leads to political and economic collapse. The Roman Empire went from being a superpower to extinct within a few generations.

I suggest that we learn from Romes’ failure. Instead of trying to defend a territory with a much larger and indefensible border (look at Canada’s border to area ratio) do a strategic contraction.

Give Alaska to Canada. Aside from the fact that the original sale of Alaska to the US as an uncolonized, uncontrolled tract was not a legitimate sale of an owned asset, Alaska today has little or no net value to the rest of the US.

The small amount of oil that can be pumped from Alaskan offshore deposits doesn’t justify the cost of recovery and transportation. That money could be used more profitably by developing clean methods to utilize the oil shale reserves within the continental US. That technology could be leased to Canada, enriching both countries and providing economic stability.

Canada has been much more successful than the US in preserving natural resources. While the US has stripped its continental territory of timber, topsoil and minerals in an effort to build its economy and “defend the free world”, Canada has been the primary beneficiary, and has preserved its assets. Allowing Alaska to revert to wilderness would go a long way toward restoring greenhouse gas balance, and would limit the geographic area that the US would need to manage if global warming were to continue.

Similar arguments could be made for giving Hawaii national independence an relinquishing claims to territories that are not located within 100 miles of the continental US.

Posted By P. Schmied Chicago, IL : September 18, 2008 1:21 pm

Bing,

You are correct to recognize many of the natural synergies, commonalities, & shared history, but you have it backwards…

Canada will be the one acquiring the United States. With it’s gigantic trade and fiscal surpluses and massive natural resources as collateral, Canada is arranging – with a consortium of foreign banks – the largest leveraged buyout in history. And thanks to the current financial meltdown & depressed prices in America, Canada is likely to see a immediate return on investment.

God save the Queen.

Posted By Sir Stephenson (Intrepid), San Diego, CA : October 8, 2008 5:14 pm

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Stanley Bing
Stanley Bing is a Fortune columnist and best-selling author of business books noted for their wisdom as well as their sharp, slightly acrid sense of humor. He is also the only writer on business and the workplace who still puts on a suit and tie and goes to do battle with the dragons that breathe fire at corporate America every day. This blog captures what remains of his brain after it has exploded in all other directions.