How to self destroy two companies in one movement

Abstract

This thesis research examines the business that underlies mergers and acquisitions (M&A), examining the fact that they have become more and more popular. Further, this research aims at proving how while this instrument and its popularity on face value appear to be beneficial, the reality is that the perceived benefits do not outweigh the actualized losses. Scientific research has in fact shown that in the majority of the cases, the M&A instrument does not lead to the originally-planned success. The research however, will focus strictly on a specific aspect of these deals which is often overlooked in the majority of real-world cases. Organizational culture in fact plays a key role in the ultimate success of M&As, and without the proper focus on it, deals are more likely to fail. To prove this, the thesis will examine two cases that made history as notoriously bad deals, which ultimately ended up hurting the companies in irreparable ways, causing them innumerable losses. The cases take place in the late ‘90s and the early ’00s and look at M&As between two US companies, and between a US and German company. These cases prove how the success behind M&As is due to more than simply the financial analysis on which they are based, how M&As can be damaging to the companies and how corporate culture is one of the most relevant aspect which is many times overlooked. M&As in the business world provide great possibility to bring separate businesses or organizations to new heights together, however without fully taking all factors such as corporate culture into account first, they create the potential for a catastrophic outcome. By being more aware of the potential negative effects of M&As, which include not meeting expectations, and by being more aware of the relevance of the companies’ culture, the potential downsides of M&As can actually be easily navigated.