Exhibition World Issue 2 — 2019 - Page 10

Analysis Would ‘Big’ provide competitive advantages, or is ‘Small’ the highly flexible smart speedboat outmanoeuvering the large tankers? (2018), and also PSAV (2018). This places Blackstone at all levels of the value chain in our industry, i.e. from venue ownership and management, to organising events and providing services. Arguably, Blackstone could be seen as one of the top companies in terms of turnover in our industry; however, does size in this case result in similar competitive advantages as in the Informa/ UBM deal? I have my doubts. Firstly, it can be assumed that the venue and the service business (IMC, NEC, PSAV) will not be merged with the organising business (Clarion, Global Sources, PennWell), making synergy effects between these lines of business unlikely. Secondly, a merged organising business may result in a number of synergies, e.g. by leveraging selected verticals or in the areas of digital, data and AI. However, Clarion is regionally highly diversified with activities in many different sectors and I expect more consolidation than leveraging of positions. Leveraging Global Sources events will hardly be possible and, in addition, a decision must be made with regard to the company’s online business. PennWell events are mostly highly specialised verticals, but a regional diversification will have limited effects on the P&L of the combined group. In case of the various Blackstone acquisitions, therefore, I do not believe that size matters such that it will provide competitive advantages to the group. vs. Last but not least, it is worth reviewing the recently announced merger between AEG Facilities and SMG, both companies engaged in the management of venues. The move creates a leading facilities management and venue services company globally. It remains to be seen whether size in this case will matter; I expect the combined group to realise some cost synergies, improve performance by adopting best practices and enhance innovation across the board. Additionally, I see synergy potential in a cross utilisation of areas like F&B and/or facility and property management. On the marketing and sales side I do not see much potential for synergy; on the contrary, additional complexities may arise from the integration of the AEG Ogden assets into the combined group. In summary, that merger seems to target a cost driven margin increase in a low margin business with little upside on the revenue side. Conclusion: Does size matter? It depends! palexpo.ch Untitled-1 1 10 Issue 2 2019 15/03/2019 11:57 w w w.exhibitionworld.co.uk