On Dec. 14 and 15, 2005, Coty, one of the world’s largest cosmetic and fragrance makers, held an all-hands-on-deck executive meeting at the company’s headquarters in New York City. Five months earlier, Coty had acquired Unilever Cosmetics International (UCI), a subsidiary of the eponymous conglomerate, and Coty’s IT team was just finishing moving UCI employees off Unilever’s infrastructure and onto Coty’s. This was tedious work, such as switching people from Outlook to Lotus Notes, the sort of project Coty CIO David Berry calls "brainless." Now, Coty’s IT department was itching for a challenge.

But not the one Berry was handed at the meeting.

UCI’s order entry, processing, financial, warehouse and shipping systems were still different from Coty’s. The newly merged entity was like a corporate Noah’s Ark, carrying two sales forces, two marketing departments, two financial teams and so on, preventing Coty from gaining the efficiencies it had counted on when it laid out $800 million for UCI. At the New York meeting, Coty CFO Michael Fishoff told Berry that he had to have the companies integrated by the end of Coty’s fiscal year, June 30, 2006.

In other words, he was giving Berry six months.

"Integration means the supply chain," says Berry, an American based in Haarlem, the Netherlands. And the supply chain was a mess; it spanned 10 countries, employed four ERP systems that fed three warehouse systems running five major distribution facilities on two continents. And now Berry had to figure out a way to get all those systems to communicate with one another. And do it in 180 days.

On his flight home, Berry had a couple of drinks and thought, "How are we going to pull this off?" By the time he got off the plane, he was, in his words, "a nervous wreck."

A Mania for Mergers

Mergers and acquisitions follow the stock market. M&As peaked in 2000, with $3.4 trillion spent on almost 39,000 deals, and dropped considerably when the market crashed. But over the past few years, as the market has rebounded, the number and value of M&As have crept back up. In 2004 companies spent $1.9 trillion on M&As; a year later, it was $2.7 trillion. Through November 2006, companies spent $3.3 trillion on almost 33,000 M&As, a rate that puts 2006 on pace to be the largest year ever for M&As.

Dan Dalton, a professor at Indiana University’s Kelley School of Business, says that companies have gone on an acquisition binge because record profits and soaring stock prices have left them more liquid than at any time in the recent past, and there are only three things they can do with the cash: save it (an option that executives favor but investors frown on); pay it out to shareholders in the form of dividends (which investors like but executives don’t); or use it to grow the business by acquiring another company (which, if it works, makes both executives and investors happy).