The Break-Up of Business Mergers

Quaker and Snapple

A new kid Snapple was added to the grocery store legend, Quaker Oats family in 1994 for $1.7 billion. Quaker oat wanted to taste the same success with Snapple drinks, as they gained from Gatorade. Amid all the criticism coming from Wall Street for paying $1 billion for the fruity drinks, Quaker Oats went ahead with new marketing campaign and set out to bring Snapple to every grocery store and chain restaurant they could. But they faced a miserable failure. Though Snapple had caught popularity as it was marketed in small, independent stores, the brand just couldn’t hold its own in large grocery stores and other retailers nationally. Soon beverage companies like Pepsi and Coca-Cola began releasing Snapple-like drinks and the general public’s new-found taste for Snapple beverages slowly faded off. After just 27 months, Quaker Oats sold Snapple for $300 million. CEO William Smithsburg’s status was forever stained, and numerous executives were fired.

AOL and Time Warner

During the 1990’s, the web was expanding and broadband industry was eating up the dial-up connection market. AOL then decided to reinvent itself as the content and broadband giant by purchasing Time Warner. The massive $164 billion deal was executed by AOL CEO Steve Case and Time Warner CEO Gerald M Levin. The results were highly anticipated and the world thought that only greatness could be achieved off a union of this kind. How wrong were we! The merger was a complete disaster and the value of AOL dropped down to $1.73 billion from $240 billion. Its user base has also fallen from 30 million to just 5 million. Thankfully AOL’s new CEO announced that Time Warner would be made an independent company in 2009, thus ended one of the worst business relationships ever.