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The Worst Company Mergers and Acquisitions

September 10, 2011
 
AOL CEO Tim Armstrong is reportedly in talks with the higher-ups at Yahoo! regarding a potential merger, but we’re not confident that teaming up would suit the tech giants.Although both companies are struggling — Yahoo, once valued at $80 billion, has fallen to $18.2 billion worth, while AOL, after a series of losses, has a market value of $1.6 billion — so a deal seems unlikely. In any case, we take a look at failed mergers of the past.

One would think that AOL would have learned from past experiences.When the Internet giant merged with Time Warner in January 2000, it was the largest merger in U.S. history and execs at both companies had high hopes for the team. AOL co-founder Stephen Case heralded the deal as “a historic moment in which new media has truly come of age.”

Daimler and Chrysler

When German carmaker Daimler, maker of Mercedes-Benz automobiles, merged with American Chrysler Corp., Daimler Chairman Jürgen Schrempp called it a “merger of equals.” But, after brief honeymoon success, the company cultures began to clash — and it wasn’t pretty.

Online retailer eBay acquired Internet phone company Skype for $2.6 billion in 2005, outbidding both Google and Yahoo. Shortly after the merger, eBay wrote off $900 million of Skype’s value, unable to integrate its new acquisition’s services. Four years, later the Internet auctioneer sold Skype to a group of private investors for $1.9 billion.

The Japanese tech company bought Columbia Pictures in 2009 for $4.8 billion. But it wasn’t a one-time price tag for Sony, who then had to hire a new executive team, shelling out $200 million for The Guber-Peters Company and $500 million to settle a related Warner Bros. lawsuit. The ordeal further resulted in a $2.7 billion write-off in 1994.

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