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One CEO justified the merger of his soft-drink company with a machine tool company in thefollowing manner: This is a great merger. First the products

One CEO justified the merger of his soft-drink company with a machine tool company in thefollowing manner: This is a great merger. First the products are unrelated. Thus ourcompanys earnings volatility is likely to decrease. First the products are unrelated. Thus our company's earnings volatility is likely to decrease. Second, our management team has that we are better manager than the former management team of the tool company, and thus we are lkely to discover new ways to create and capture value within the tool company. " Evaluate this rationale

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