Over the years, many big tech companies have engaged in mergers and acquisitions that turned out to be rather disastrous, but what are the worst tech mergers and acquisitions ever? With the stock market near all-time highs and money still being relatively cheap as the Fed remains cautious about raising interest rates, there have been a couple of very large acquisitions recently. In 2015, Dell Technologies Inc (NYSE:DVMT) paid $67 billion to acquire EMC, while last year, Microsoft Corporation (NASDAQ:MSFT) bought LinkedIn for $26 billion.
As with most acquisitions, the market was divided about these deals and whether or not they would work. This is how things have always been and only time will tell if the buyers made the right call. Microsoft and Dell are not the only tech companies that have completed acquisitions recently. Last year, salesforce.com, inc. (NYSE:CRM) agreed to buy Demandware for $2.8 billion in cash, while QUALCOMM, Inc. (NASDAQ:QCOM) is in the process of buying NXP Semiconductors NV (NASDAQ:NXPI) for $47 billion.
Tech companies engage in M&A activity for various reasons. In some cases, the market becomes saturated or is not growing, so companies combine in order to consolidate the industry, to expand their market share, and to save costs thanks to synergies between the newly-merged companies. In other situations, buying another company can lead to an expansion into other industries, like AT&T Inc. (NYSE:T) buying Time Warner Inc (NYSE:TWX) to get into the content industry. This in turn allows for the creation of companies that are diversified across several markets, which makes them better investments.
Often, such deals are generally met with cheers. Stock prices of the acquired companies soar and often the buyers’ share price also appreciates as investors bid up the stock with the expectations that the company will become more profitable or be a more solid investment in the future. However, in some cases the joy is premature, as investors don’t take the time to analyze the deal in detail and assess its potential and the possible synergies that could emerge from it. In turn, this can lead to more disappointment when it becomes clear that the deal was not as good as “advertised”.
With this in mind, let’s take a closer look at a bunch of tech M&A deals that turned out to be total failures. Microsoft Corporation (NASDAQ:MSFT) might have hit a small jackpot when it bought Skype, but it also lost a lot of money on several other occasions. Alphabet Inc (NASDAQ:GOOGL), which is currently involved in a number of segments within the tech sector, also made a couple of bad calls. The deals that we selected among the 11 worst tech mergers and acquisitions in history did not lead to the demise of the buyers, but they did cost them a lot of money. The list is sorted based on the initial value of the transactions.
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And now, let’s see our list of worst tech mergers and acquisitions ever.