Banking & Finance, Economic Development, and Higher Education

Where the West Michigan corporations went

GVSU professor says companies need to be ‘bears’ or risk being acquired.

May 29, 2015
| By Pete Daly |
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A 23-year faculty member at the GVSU Seidman College of Business plans to study what happened to some well-known publicly traded companies that once were headquartered in West Michigan.

“We have lost quite a few of our (corporate) headquarters,” said Yatin Bhagwat, a finance professor. “It means our firms are becoming targets” for acquisition, he explained. “They need to be bears — acquirers — and not targets.”

Bhagwat said he still remembers the strong reaction of L. William “Bill” Seidman to the acquisition of Old Kent Bank by Fifth Third Bancorp in early 2001.

Seidman, a world-renowned economic analyst from Grand Rapids who died in 2009, once sat on the board of Old Kent. He told the Grand Rapids Press when he heard the news about Fifth Third that “if I’d been in town, I’d have laid down and chained myself to the door and said, ‘No way.’”

Fifth Third is an Ohio-based bank, as is Huntington, which acquired First Michigan Bank Corp. in 1998.

Bhagwat said he recalls a news report during the Old Kent acquisition in which Seidman spoke about the loss of Michigan-based banks to Ohio financial corporations.

“Michigan may beat Ohio State in the football game, but Ohio is beating Michigan in the banking game,” said Bhagwat, paraphrasing Seidman.

He said Seidman was “one of the wisest persons I have ever met.”

He intends his future research to be a historical review of former publicly held companies in West Michigan and the situations that led up to moving their corporate headquarters out of the region or being acquired by larger companies elsewhere.

Having corporations that are headquartered here means there will be more jobs in West Michigan, he said. Companies based here need to build strategies “to grow and not sell out,” he added.

One example of a West Michigan company that does act more like a bear is Whirlpool Corp. in Benton Harbor. One of its most notable acquisitions was major competitor Maytag in 2006. The well-known Maytag brand, now owned by Whirlpool, is still in the marketplace, but there is no longer a Maytag corporate headquarters in Iowa.

Another “bear” would be Perrigo Co. The Allegan company has been acquiring other companies around the world regularly and is now one of the world’s largest manufacturers of pharmaceuticals and over-the-counter medications.

Although it moved its corporate headquarters to Ireland recently for tax purposes, Perrigo’s North American base of operations is still in Allegan.

Most recently, Perrigo bought the Mexico operations of Pantheon Pharmaceuticals for $34 million. It already has 10 plants and 1,200 workers in Mexico.

Perrigo is now the object of a major takeover attempt by Mylan NV, which is headquartered in Hertfordshire, England. Mylan is attempting to acquire Perrigo for $32.7 billion, although Perrigo firmly rejected the unsolicited offer in April. Myland plans to continue its takeover attempt, however.

Ironically, Myland itself is the object of a takeover by a larger competitor — Teva Pharmaceutical Industries Ltd. of Israel. Teva offered slightly more than $40 billion for Mylan, which has so far rejected the offer.

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