FAILURE CASE OF M&A Presented by Ashish Sharma

` Mergers and acquisitions may seem to be beneficial. and ruin the confidence of their shareholders. They have been found to lead to cost cuts and increased revenues. . resulting in the amalgamation of two conglomerates. tarnish their credibility in the market. These failures may harm the companies. However. merger and acquisition failures are not uncommon.

It is believed that when two companies merge. . The reason is that their value on the stock market deteriorates.` ` ` Studies reveal that approximately 40% to 80% of mergers and acquisitions prove to be disappointing. the combined output will increase the productivity of the merged companies.

3. 5. 9.1. 7. 8. 4. Excessive premium Lack of Research Diversification Cultural Shocks Poor organization fit Striving for bigness Faulty evaluation Ego clash Overleverage . 2. 6.

BenQ acquired Siemens in Oct 2005 .

computing and communications devices under the ³BenQ´ brand name.consumer electronics. The head office is located in Taipei .BenQ Corporation is a Taiwanese multi-national company that sells. which stands for the company slogan ³Bringing Enjoyment and Quality to life´.

. computing and communication products. laptops. including consumer electronics. netbooks. computer keyboards. Its principal products include TFT LCD monitors and televisions. optical drives. optical discs and mobile phones. mice. digital projectors. All-in-one-PCs.BenQ sells and markets technology products. digital cameras.

Energy. Siemens has international headquarters located in Berlin. The company has three main business sectors: Industry. Munich and Erlangen. and Healthcare. Germany.Siemen AG is a German engineering conglomerate that is the largest in Europe. with a total of 15 divisions. .

. 2007. He succeeded Dr. Klaus Kleinfeld after the scandal charges of bribery against Siemens. Peter Löscher is the current president and the CEO as of July 1. He succeeded Dr. Heinrich von Pierer on April 26. Gerhard Cromme is the current chairman of the supervisory board of Siemens AG.Siemens was founded by Werner Von Siemens on 12 October 1847. 2007.

BenQ acquired the loss-making mobile devices division of Siemens. it was unable to make a mark in the highly competitive industry. Despite producing high quality phones. BenQ planned to sell co-branded mobile phones (BenQ-Siemens) in addition to the BenQ and Siemens brands.In October 2005. With the acquisition. .

In early 2006. The Co. estimated these measures would reduce expenditure by 30% . sold the R&D center in Denmark. BenQ Mobile undertook a series of cost cutting measures. It closed down design centre in Germany.

.Siemens decided to exit the business. Securing the future of its employees was high on its list of priorities.

Cultural problem Its biggest customer Motorola left him BenQ was not financially sound and he started making huge losses Several B2B customer started seeing him as potential customer . 2.1. 4. 3.


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