MBS-FEC Proposed Merger Will Not Proceed

In an interesting turn of events, Melbourne Business School (MBS) announced today that its proposed merger with the University of Melbourne's Faculty of Economics and Commerce (FEC) will not proceed. (Go here for background.)

Indeed, this won't even been put to vote at the 7 October Extraordinary General Meeting of MBS Ltd's members (read: shareholders) because the resolution is bound to fail. That's because enough members have already told the Board they will vote against the merger so there's no way the Board will get the majority needed to proceed.

Why Will Some Members Vote Against the Merger?

I'm not exactly sure because they haven't said.

I can speculate, though. Maybe they don't want to dilute MBS Ltd's focus (or brand) because, post merger, they would have had the added responsibility of managing the undergraduate economics and commerce programme. Maybe it's less about the lack of focus and more about sticking to what you know you're really good at (i.e. graduate-level teaching). Maybe they think the merger is good in theory but would be impossible to pull off in practice. Maybe it's lots of separate little issues that, collectively, become one big one. I don't know.

Regardless, the members are obviously not convinced that the merger is good idea and, since they have the deciding vote in the matter, it's been called off.

As MBS Chairman Ron McNeilly said:
"Ultimately the continued success of MBS depends on the support of its members, alumni, students, clients and the broader business community.  The Board has accepted that without the overwhelming support of these stakeholders, a merger at this time would not be in the best interests of the School."

Meanwhile, the University of Melbourne's Vice-Chancellor Glyn Davis had this to say:
"Over time this will be judged a missed opportunity for the University and the MBS to create the strongest business school in our region."

That may be true and, who knows, the merger could still take place a year from now or three years from now. All we know is that it's not happening now.

What Next?

Both MBS and FEC will continue to operate they way they're operating now.

But, of course, they won't. They've just gone through a process in which they identified their gaps, overlaps, and opportunities for growth. Their conclusion was that they should work together and they went as far as to plan exactly how they'd do that. And now they've been told it's not going to happen. So, yeah, things won't go quite back to normal.

Meanwhile, the confusion in the market of whether you should do a masters in business from FEC or a masters in business administration from MBS will remain. Here's hoping they start by making things like that clearer because, if they don't sufficiently differentiate themselves from each other, the competition won't help anyone...least of all potential applicants to both institutions.