7 Worst Mergers of All Time

By siliconindia | Tuesday, 10 March 2015, 12:39 Hrs

# Nortel and Bay- $9.1 Billion

Before RIM, Northern Telecom Ltd was the leader in technology in Canada. In the late 90’s the company bought Bay Networks for $9.1 billion. Renamed as Nortel Networks it hoped to earn a bomb by selling fibre optic network communication equipment.

The company’s stocks went up on Wall Street and a lot was expected of it. Unfortunately this was not sufficient to make a profit. The company suffered losses quarter after quarter.

After many efforts to restructure the company, it finally declared bankruptcy in 2009. Its various businesses were eventually liquidated.

# New York Central and Pennsylvania Railroads- $5 Billion

In 1968, the New York Central and Pennsylvania railroads merged and became the sixth largest corporation in America. It was named as Penn Central. On January 1, 1969 The New York, New Haven & Hartford Railroad was added to the union and by 1970, the company had filed for bankruptcy.

For the union an implementation plan was drawn up but not carried out. Later, the railroads found them unable to keep up with the intensifying costs of employees, government regulations, and faced major cost-cutting.

There was a lack of long-term planning, culture clashes in the company, and poor management.