Ascend Communications (Lucent, 1999, $20.5 billion)
Lucent’s $20.5 billion Ascend acquisition is largely forgotten but it stands as one of the most mistimed of all time. Networking had been hot in the 1990s but by 1999 it was becoming a commodity. It didn’t help that Ascend was bought just before the crash but insiders spoke later of a culture clash between the staid lucent (comms) and the brash Ascend.
Veritas (Symantec, 2005, $13.5 billion)
The idea of a security firm, Symantec, buying a backup firm, Veritas, seemed like a great idea at the time but along the way something went awry. At $13.5 billion the price was too high for a start but there were deeper issues, mainly to do with the difficulty of merging two firms that were so completely different. In 2015, with the cloud eating into sales, Symantec agreed to sell Veritas to investors for a knock-down $7.4 billion.
Nokia (Microsoft, 2013, $7.9 billion)
Microsoft has bought a lot of companies in the last two decades but the $7.9 billion it spent on Nokia’s mobile division as part of outgoing CEO Stave Ballmer’s mobile catch-up remains its largest to date bar Skype in 2011. Within two years, the idea of going into the handset business looked pretty silly with the firm admitting that it had failed amid a massive write-down. The company’s workforce was slashed as the lights went out on once great firm.
Motorola (Google, 2011, $12.5 billion)
Google apparently bought Motorola for $12.5 billion for its patent haul rather than it smartphone-making business but it still raised eyebrows when it sold it on to Lenovo at a bargain $3 billion only 18 months later. It retained most of the valuable patents but the size of the write-down still puzzled analysts. Perhaps super-clever Google was just as prone to acquisition hubris as many other big firms before it.
Compaq Computer (HP, 2002, $24.2 billion)
Compaq made Intel PCs and servers and so did HP – what could go wrong? The synergy was so good HP decided to stump up $24.2 billion, a lot of money even for the inflated expectations of the early 2000s. Thousands were eventually laid off, value withered and people tried to remember what the point had been. Some in HP still say it was worth it but the reputation of CEO started to Carly Fiorina took a hit. The later acquisition of EDS made added to that woe.
EMC (Dell, 2015, $67 billion)
The jury is still out on Dell’s staggering $67 billion purchase of storage and services firm EMC but the vultures started circling from the off. The foundation of computing is storage but will it stay that way for EMC? A range of innovative firms is nipping at its heels as the cloud consumes the industry. The biggest doubts simply over the size of Dell + EMC, which looks like an old-fashioned argument about size.