. The Sears Roebuck Co. And Kmart Holding Corp. Companies were an unsuccessful acquisition. The CEOs of Sears, Roebuck, and Kmart Holding, planned to merge into a giant $55 billion retail company with the hopes that it would produce stronger brands, greater productiveness in operations and higher returns than either company could accomplish alone. At the time of the merger, both companies were struggling. Some of their problems were the recession, poor investments, and shrinking revenues. They also could not keep up with superstores like Walmart. With this union, they would both benefit different ways. Kmart was going to benefit from the planned cost sharing of several of Sears proprietary brands as well as grant freedom to obtain significant profit and cost synergies including merchandise and non-merchandise purchasing, distribution, and other SG&A expenses. Sears would move out of malls, and would benefit from Kmart’ store’s locations were are in the high-income customer target of Sears. Moving out of malls meant that Sears would sell some of it real estates which would have brought money to the company. Two struggling companies coming together potentially make a bigger struggling company.
Another example of an unsuccessful merger involves internet giant America Online (AOL) and media group Time Warner. In the year 2000, they planned a merger at the cost of One hundred sixty-five billion dollars. Some people believe this to be the worst merger deal in American business history. This deal was supposed to be an equal venture, however AOL, was holding more valuable stock when the merger happened, AOL owned fifty five percent of the newly combined company.