Finance Essay

606 Words Nov 23rd, 2015 3 Pages
Time Warner is the result of the merger in the year 1989, of worth 14$ billion between the two big players: 1. Time was established in the year 1922 and was in magazine publishing business. It was followed by Television Company and acquired American television and Communication Company. 2. Warner Brothers established in the year 1923, was into the film production.
In the year 2001, the merger between these two giants was held with the aim “to create the world’s fully integrated media and communication company for the internet century in an all stock combination valued at $350 billion.” This is the largest merger in the history of America (Theierer Adam, January 11, 2010).
The merger was carried so as to create the global media
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This merger was neither horizontal and nor vertical and such kind of mergers fall in the category of “catch – all.” This was not even conglomerate merger as it results in the extension of product line which was also not held as both the companies operated in two separate market and media outlets (Turner James M., May 2002).
Yes, the merger doomed from the outset, as the shares of both the companies dropped immediately after the announcement due to the unrealistic valuation. Customers were not ready to pay add – on subscription fee. Both the companies failed to implement their strategy and were not able to encourage the climate within the companies which can lead to the initiation of synergy. Moreover, both the companies failed to understand the trend and manage the change in the organization (Abuiliazeed Ahmed, et al, April 2012).
References:
1. Theierer Adam, January 11, 2010, AOL – Time Warner Merger at 10: Lessons for Today, data retrieved on October 29, 2013 from http://techliberation.com/2010/01/11/aol-time-warner-merger-at-10-lessons-for-today/ 2. Turner James M., May 2002, Mega Merger, Mega Problems: A critique of the European’s community commission on competition’s review of the AOL/ Time Warner Merger, Page no. 136, data retrieved on October 29, 2013 from http://www.auilr.org/pdf/17/17-1-5.pdf 3. Abuiliazeed Ahmed, et al,

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