The recent implosion of the proposed merger between AT&T and T-Mobile may sound like the merger fumble of the decade, but, as far as corporate mergers go, the $39 billion deal was relatively small. Looking at the largest corporate mergers that went south since 2001 shows there have been far larger deals that fell apart at the last minute. The reasons for their collapses are varied, but they are sure to have left a sour taste in many shareholders’ mouths. The following are the three largest failed mergers of the past 10 years.
Telecommunications giant Comcast offered $66.6 billion for the Walt Disney Company in 2004. The move came as a surprise as then CEO Michael Eisner had rebuffed all of their offers prior to the bid. Possibly hoping to exploit tensions between Eisney and his board, Comcast decided to pursue the matter by sending a letter to the Disney board and making the multi-billion dollar offer public. Disney stocks initially rose, while Comcast’s sank. And when neither the board, nor Disney shareholders expressed any enthusiasm for the deal, Comcast had to withdraw the bid and look elsewhere to expand their empire.
It seemed like a match made in heaven. GE, one of the world’s largest manufacturers of airplane engines, and airplane electronics giant Honeywell. GE CEO Jack Welsh’s bid of more than $50 billion beat a rival’s bid for Honeywell, the Department of Justice okayed the deal, and everything seemed to be going along smoothly. But something happened that had never happened before. The European Union’s Commissioner for Competition refused to approve the deal unless GE made some major concessions to ensure they didn’t dominate the market, concessions that made the deal pointless. And in a flash the perfect deal disintegrated. This was the first time a foreign government nixed a merger between two U.S. corporations already approved by the Department of Justice, but in a global world populated by multinational corporations, the tangle of anti-trust laws in different jurisdictions is sure to cause more headaches like this.
In their drive to challenge Google, Microsoft attempted to acquire Yahoo. Like the GE-Honeywell deal, it looked like the perfect match. Combining forces they would be positioned to seriously challenge Google’s dominance, then at a little more than 50 percent of the market (today more than 60). Microsoft negotiated with Yahoo for several months, but talks stalled. Yahoo just wasn’t swayed by Microsoft’s offers. Some felt their divergent corporate cultures would not mesh well. After months of haggling, Microsoft decided to take charge and initiated a hostile takeover attempt in 2008. They offered $47.5 billion and battled it out for several months. When it became obvious they weren’t making any headway, they abandoned the offer. But the story doesn’t end there. Later they entered a limited partnership with Yahoo, combining forces on several front to rival Google. This failed merger, however, is one that may ultimately be consummated. As of November 2011, merger talks seem to be back on the table.