Thanks to The Independent for this one – the ten companies which have destroyed most value in the acquiring company’s share price. The most destructive deal of all-time was, reckons The Indie, RBS’ takeover of ABN-Amro. Apparently only 35 per cent of M&A deals lead to an increase in the value of the acquiring company’s shares
1. AOL – Time Warner
$164 billion deal in 2000. In 2002 reported a $99 billion loss with $45 billion write-down. Destroyed 97% of shareholder value.
2. Invensys – Baan
Invensys paid Euros 762 million to buy Baan in 2000. Baan was sold in 2003 for $130 million.
3. Taylor Woodrow – Wimpey
Taylor Woodrow bought Wimpey for £5 billion in 2007. Since then £4 billion has been wiped off Taylor Wimpey’s share price.
4. HSBC – Household
HSBC bought Household for $15 billion in 2003. By the end of 2007, HSBC had written down $17.2 billion on Household’s value.
5. Quaker Oats – Snapple
In 1993 Quaker paid $1.7 billion for Snapple, outbidding Coca-Cola in the process. In 1997, Quaker sold Snapple for $300 million.
6. BMW – Rover
In 1994, BMW bought an 80 per cent of Rover for £800 million from British Aerospace, and a 20 per cent holding from Honda. After investing millions, it sold the whole company back to the ‘Phoenix Four’ for £10 in 2000. Rover went bust 2005.
7. Royal Bank of Scotland – ABN Amro
The Royal Bank of Scotland and two other European banks paid Euros 71 billion for part of the Dutch lender ABN Amro, which RBS’s arch-rival Barclays had agreed to buy. RBS may have to write-down up to £45 billion on the value of ABN-Amro and RBS is now owned by the UK government.
8. France Télécom – Orange
In 2000, France Telecom bought Orange for Euros 45 billion. The stake has been written down several times since.
9. Daimler – Chrysler
Daimler paid $36 billion in 1998 to buy Chrysler. In 2007 80 per cent of Chrysler was sold to Cerberus for $7.4 billion. In 2009 Chrysler needs US government bail-out.
10.British and Commonwealth Holdings – Atlantic Computers 1988
After £434 million takeover, both companies were bankrupt within 12 years.