HP and Autonomy give a great example to the importance of understanding synergies when making a cross-border deal.
Differences in accounting practices, especially revenue recognition, created a disconnect between HP and Autonomy. This led to a massive write down on HP’s books and eventually the sale of Autonomy.
The environment, specifically the perception of the public, lead to negative media coverage and concerned shareholders.
Friction and distrust resulted from differences in behavior between HP and Autonomy. One company focuses on tasks, while the other focuses on relationships.
Lack of communication by both HP and Autonomy lead to Autonomy functioning as an independent unit. Communication, as a result, never developed.
Applying the Mergers and Acquisitions Synergies Framework to the HP-Autonomy shows the cultural missteps that resulted in a failed merger.
Thinking of acquiring a business either internationally or domestically? Here is a user-friendly checklist of key questions to consider when evaluating the target’s finance and accounting departments.
A checklist for the environment aspect of a successful M&A. Public acceptance, logistics, and other potential risks are key areas of focus when addressing the environment.