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.
Applying the Mergers and Acquisitions Synergies Framework to the HP-Autonomy shows the cultural missteps that resulted in a failed merger.
Had Microsoft recognized the differences in the synergies between the company, the acquisition of Nokia would have resulted in a more profitable exchange for both parties.
The differences in financial reports and even the culture of Nokia’s company may have contributed to the poor acquisition.
An introduction into Microsoft’s acquisition of Nokia that soon became one of the worst acquisitions in the history of M&A.
Lenovo is an example of a successful cross-border M&A, as it displays each of the components of the M&A Synergies Framework.
With differences in accounting standards and valuation, the Lenovo-IBM PC merger required attention to both the accounting and finance aspects of the business.
This series uses the Mergers and Acquisitions Synergies Framework to explore the careful way Lenovo managed cultural integration with IBM to become a world leader in computer sales.
Many cultural differences are manageable but require an awareness and attention in addressing the problems that could lead to failed mergers. Use the M&A Polar Grid Template to evaluate where your M&A stands.