Reflections on the ‘Worst Deal in History’ – and the Best

If, like my students, you have been doing some reflections on the big business stories of the past decade (a good place to start is the Guardian’s Business Review of the Decade) you might have looked at the mega $164bn merger that created AOL Time Warner in 2000. What seemed like a good idea turned out to be a massive miscalculation. Now the man behind the deal has appeared on CNBC to offer his humble apologies for the lost billions. Well worth checking out, and the interesting series of slides on the Top 10 Best (and Worst) Mergers of All Time. What’s the difference between a merger that boosts profits and performance as compared to one that destroys value?

It’s always interesting to think about who has the authority to make decisions in organisations – and who should be held accountable for mistakes. Former AOL-Time Warner CEO Gerald Levin acknowledged he led the “worst deal of the century” and said CEOs should take responsibility for failed companies. A brave statement, which you can see here. There’s also this link which takes a look at the good, bad and ugly mergers of the last decade. It’s rather US - orientated but the business messages inside could apply in the UK.

The merger deal you’re probably watching most closely is Kraft’s attempted takeover of Cadbury. A marriage made in heaven?