Hp 's Value Destroying Acquisition Deal

869 Words Apr 12th, 2016 4 Pages
HP has long been one of the largest and best-respected companies in technology for decades. The company had made multiple M&A throughout the years, some very successful and others not so much. However, the acquisition of Autonomy (of around $11 billion) has earned HP a spot among the worst, most value-destroying acquisition deal of all time. This acquisition deal was said to be a disaster almost from day 1. The decision has been proved controversial, with many shareholders claiming that HP has over-paid. Although nobody could have really guessed the outcome of this deal, they were a few red flags that were raised throughout the entire process that could have saved HP its pride and money. In M&A, post-deal closing surprises are more common than one may think. Of course, a surprise of this magnitude is huge and clearly points to mistakes on HP’s part. Nonetheless, several lessons could be learned from HP’s misfortune. First, the acquiring firm should have a pre-acquisition protocol and respect it. Second, if a red flag is raised, and how ever insignificant, needs to be thoroughly inspected and cleared before continuing. Finally, there should be a post-acquisition plan put in place beforehand and the company should follow it.
The followings are some of the circumstances that have contributed to this terrible HP/Autonomy acquisition:
 A questionable growth strategy model and a Lack of management foresight
HP’s former CEO Leo Apotheker, after his instigation, wanted to make a…
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