Mergers and acquisitions which failed

Employees are much less anxious and more inclined to support the integration if they understand both the role it plays in the future state of the business, and their own role in the journey. Mergers and acquisitions naturally create some hiccups. Empowering the broader team to raise concerns and share ideas, especially in those early days, helps leadership identify and resolve cultural and organizational issues faster.

It also tends to create a more engaged workforce inclined to deliver their best work. The Hewlett-Packard and Compaq merger in also failed. This was unusual since both the companies had great and well-known products.

The reasons are believed to be a difference in the way they were driven. HP has an engineering-driven culture that was more aligned to looking at a consensus for decisions, whereas Compaq had a sales-driven culture that emphasized rapid decision-making.

The revenues dropped drastically after the merger, thus making it a failure. Could elements of culture A be brought out more in a specific division, department, or area of the business to resolve some of the conflict? What if aspects of culture B were made more prevalent within a specific organizational process or approach?

Small tweaks like this can reduce friction and make various stakeholders happy. Google acquired Nest , a smart-home startup, for its automation capabilities and innovation in Nest was a company with a transparent top-down approach, whereas Google was more engineer-driven and had a bottom-up culture.

Focus on identifying the areas where the most commonality exists and building appreciation for the value of the differences that each organization brings. A focus on people as much as on other business aspects is essential in mergers or acquisitions. That one step makes integrating multiple teams much more seamless. And while considering the negative aspects of both cultures is essential, so is factoring in the positives.

What do you think is a robust solution for cultural incompatibility occurring as a result of a merger or acquisition? Share your thoughts with us on LinkedIn , Twitter , or Facebook. By signing up, you agree to our Terms of Use and Privacy Policy. Your email address will not be published.

Save my name, email, and website in this browser for the next time I comment. No Account? Sign up. By signing in, you agree to our Terms of Use and Privacy Policy. Already have an account? Sign in. Enter the email address associated with your account. We'll send a magic link to your inbox. Email Address. Due to the above-mentioned issues, Apollo was unable to finalize the deal from its end. Further, Cooper sued Apollo to complete the deal, that is to enforce the buyout agreement.

The matter was taken up to the Supreme Court after arbitration proceedings by Cooper. The Breakup fee for Apollo was million dollars, whereas for cooper had to pay the termination fee of 50 million dollars. Finally, the deal was called off by Cooper. The stakeholders of the company were of the view that the founders managed to not only to take decisions but also practice mismanagement although equipped with just 6.

Prior to the merger talks, the company had acquired a lot of other companies like Freecharge and additionally burnout, later sold off to a very less price. Flipkart is a private limited company based in Bengaluru, India.

Softbank was pushing forward the deal and was exploring strategic options. Snapdeal called off the deal with Flipkart to go with their Plan B, Snapdeal 2. Successful deals do not only mean hassle-free transactions. If the core purpose for getting into an arrangement is not served it could mean that the deal is unsuccessful.

Corus was a merger between British Steel and Koninklijke Hoogovens. The acquisition would have created the fifth largest steel producing company in India. It invested more than 12 thousand crores in Corus post-acquisition. Suzlon Ltd. Shree Renuka Sugars was started by acquiring sick sugar mill Nizam Sugars. However, the company has experienced a downfall since 5. The debt of SRS rose to about four times that of its equity.

One of the prime reasons for the crisis was a drought in Brazil that affected sugarcane production. Later, they had to fire workers at the sugar mill and return the land taken on lease.

It tried to sell one of the plants in the auction and the same was restrained by an injunction order from the court. Bharti Airtel lacked in their due diligence and later discovered that Zain had not invested enough in the assets of Africa. Therefore, this acquisition comes under a failed one as Airtel Bharati was not successful in achieving its intention.

Sun Pharma Industries Limited, an Indian Listed Company and Taro entered into a definitive agreement, wherein high stake was purchased by the former when the later had liquidity issues.

Later, there was a litigation battle in US and Israeli courts between the two as Taro accused Sun Pharma of certain non-disclosures and lower valuations which lasted for three years. Although, after the court battle Taro continues to be a subsidiary of Sun Pharma and it would not in any way affect the business, the intention of Sun Pharma behind the acquisition was not served as it was looking forward to buyout Taro and delist it from New York Stock Exchange for better dividend payout and cash flows.

Without an understanding of the landscape, the danger existed that the participants would overpay. And so they did. The Daimler-Benz and Chrysler is regularly used by MBA courses as the textbook example of how culture clashes will inevitably lead to the failure of a deal. It has been said in some quarters that the two cultures were too different to ever be brought together. Decision making at Daimler-Benz was methodical, at Chrysler it was creative and unstructured; salaries at Daimler-Benz were conservative, much less so at Chrysler; finally, there was the flat hierarchy that existed at Chrysler compared to the top-down structure at Daimler-Benz.

But this second part of the equation - making high-quality handsets - has been the undoing of dozens of companies in the telephony industry. The same awaited Motorola. Google thought so poorly of its new handsets that it contracted others, including Samsung and LG, to develop its Nexus handsets. For Google and Motorola in , read Microsoft and Nokia a year later in With smartphones, and shortly after tablets, slowly beginning their rise to ubiquity, it was vogue for the biggest players in technology to announce that they would soon be producing their own handset devices.

And it seemed like they all viewed the short-cut to achieving this being acquiring an existing handset maker. The combined Sears Holdings, was the third biggest retailer in the United States at the time of the deal, but e-commerce was just about to take-off.

It also coincided with a series of cuts at Sears Holdings, at a time when it probably needed investment in stores, inventory and an online strategy, more than ever. It filed for bankruptcy in after years in existence. The theory was that this would allow communication between buyers and sellers on eBay, smoothing transaction flow and generating more revenue - beautiful synergies.

This does have a ring to it.