Daimler’s shareholders have been desperate for the divorce papers to be signed. The unhappy union should be a warning to others: compatibility matters in business as well as love, and a happy wedding day is not a guarantee of a happy marriage.
As we see a rush of merger and acquisition (M&A) activity in the local market, it would be worthwhile to be reminded of the difficulty of making such transactions successful. It is said that mergers are triumph of hope over experience -the same applies to marriages some argue sarcastically. Despite experience that points to bleak outcomes, mergers continue in the hope of success. Such is the fate of Daimler Chrysler.
Daimler Chrysler tied the knot back in 1998 with a $36bn price tag for Chrysler. Few days ago this came to an end and the knot was untied at a price of $7.4bn. Separately some analysis shows that Daimler would not receive this amount and it will actually end up paying. This is a rude awakening to merger dreams. So before you tie the knot, business or otherwise, make sure you have a meeting of minds, without which mergers, like marriages, are doomed.