WHY MERGERS AND ACQUISITIONS FAIL
In the year 2000, America Online (AOL) merged with Time Warner in a deal valued at $182 billion. So far, it is the second largest merger in history. When the deal was announced, Steven Case, Co-founder of AOL said, “This is a historic moment in which new media has truly come of age.” CEO Gerald Levin of Time Warner said, “Because AOL takes us to the internet, our merger with AOL will unleash immense possibilities for economic growth.” The announcement was hailed by many as a momentous coming of age for the internet. Within a year, the two companies hated one another. Employees from both companies continually clashed with one another, and leaders from each company spent their time blaming one another for the financial losses that soon began piling up. Thousands lost their jobs. There were countless executive upheavals. Ten years later, the combined values of the two companies, which are now separated, was one-seventh of their combined wo...