ASSIGNMENT-M&A

RINS RAJU
I7PO10

1. Three main benefits expected from the merger and to what extent each of them was achievable in your
view?

Three main benefits of the merger:

1. Create an integrated Converged product line. To link both companies’ products those were
complementary with common features to create a fully integrated system to deliver to customers.
2. Freed-up resources. The resources dedicated to develop products to compete against each other
was freed-up to refocus those on new fast growing, emerging products.
3. Global foundation. US Robotics was a North-American and European company but 3Comm was a
global company. Combining the two can establish a global scale company that can satisfy customers
anywhere in the world.
2.What was admitted as big problem/ challenge in making the merger a success and what steps were taken
to overcome the same?

1. The biggest challenge was to integrate the corporate cultures of both the companies. There was a big
cultural difference and bringing in a common culture after merger was the biggest leadership
challenge.
2. Apart from that the external market forces and timing was a big challenge for the success of the
merger as it has nothing to do with the companies’ business model.
3.Form three reason for demerger

Two years after the deal closed 3comm ‘s stock sunk by two –thirds from its level 3 months before the deal
was announced putting its return nearly 200% points below its industry peer that was before 3comm span
off. the red hot palm unit acquired in robotics deals.in less than three years after what was the most
expensive acquisition ever in the computer networking industry

4.Reason for demerger

1. Combined firm never managed to dominate its industry or was envisioned at the time of the deals
2. The companies were never able to efficiently meld two verities different corporate culture- a
common problem in mergers
3. The deal suffered before 3 comm had bought yesterday’s technology not realizing how satisfy it
would be

Lessons learned in context of Merger and acquisition

1. Economic drives the merger: in this deal it happened us to achieve horizontal integration to achieve
economic of sale and strengthen their market power
2. HUBRIS: 3 comm were over optimistic in order to build an empire without considering the economic
they made a subjective decision by merging US robotics
3. People make it happen /not happen: culture to integrate the corporate culture of two companies
which had many cultural differences their lies a big challenge in forging a new culture of merged
entity and their lies a leadership challenge in execution part of it
4. Technology: Analog modern at the time of merger was a booming part of the business but
unfortunately also the beginning of broad band. So that was the end of the business because
technology changed so quickly