The worst deal in corporate history
In 2001, during the heady tech boom, Time Warner, film company HBO and Warner Bros struck a US$350bn merger with Internet service provider AOL. The cultures were oil and water
While Brait’s R35bn impairment of British fashion chain New Look may seem like the worst deal imaginable, it’s not a patch on the merger universally acknowledged as the worst in global corporate history.In 2001, during the heady tech boom, media company Time Warner — which owned network news channel CNN, film company HBO and Warner Bros — struck a US$350bn merger with Internet service provider AOL.Analysts jostled to laud it as a "brilliant" combination that would set the pace in the media sector. Rivals scrambled for similar deals.On paper, it seemed solid enough: creating a digital media powerhouse to dominate music, publishing, entertainment and the Internet.But for a start, the cultures were oil and water. Shortly afterwards, when the dot-com bubble burst, AOL stock imploded from $226bn to $20bn. In 2010, former CEO Jerry Levin, who stitched the companies together, admitted: "I presided over the worst deal of the century, apparently".The merger led to huge, almost immediate, wri...
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