In the same editorial, by Nelson Luscombe, in CA Magazine from March, 1987, “When two plus two equals three”, the source of the title relates to comments by William Mulholland (1926-2007), then Chair of the Bank of Montreal:
In his “Chairman’s Letter to Shareholders,” in the bank’s latest annual report, he writes: “Corporate takeovers are not bad per se or even necessarily unconstructive. Sometimes two plus two does equal five, but equally it can sometimes equal only three… Corporate takeover activity should not only serve a basic economic purpose–that is, provide net value added–but it must be seen to do so.”
Those engaged in this activity argue, sometimes correctly, he says, that they serve a legitimate economic and social purpose by identifying areas of opportunity and, by their actions, force a more efficient use of capital. “Even when true, this is a tough argument to sell,” he says. “Try selling it to the employees of a business that is dismembered or a plant that is shut down to help finance the acquisitor’s purchase or to turn a quick profit.”
Mulholland is even more graphic in a Maclean’s interview with Peter Newman. “Who has put up a new factory, brought in a new mine, put up a new pulp mill in the past five or ten years?” he asks. “I can count them on my fingers. It’s sick. The world’s monetary system is flooded with liquidity, but it ain’t being productively employed the way it used to be. People are finding it’s cheaper making money with money than to make better goods or new products, or bring in new resources. …This wave of takeovers without productive investment is wrong, just wrong.”
Thought takeovers were primarily to eliminate competition, rather than in the interest of general economic growth.
Some thought differently. Social roles and responsibilities of those with economic means.