While buying up other companies is a great way for big businesses to increase their market share and diversify their offerings, some are doomed to fail. 

From iconic brands enticed by rising stars to culture clashes that caused the loss of millions, read on to see the most famous failed US corporate acquisitions and mergers of all time. 

In 1962, two of the USAs biggest travel providers – and rivals – decided to team up with plans of soaring success. Had their merger been successful, these industry veterans would have quite formidable with analysts predicting they would become the sixth biggest corporation in the USA at the time. 

However, just as the merger was approved in 1968 the world of air travel took off, which affected public appetite for riding the rails. The new super-company was then forced to contend with tight regulations that put the brakes on their ambitious plans. Unfortunately they went bankrupt two years later among rumors of in-fighting and conflicts over leadership. This led the government to take action, and President Nixon signed the Rail Passenger Service Act in 1970, creating a national railroad entity that would later become known as Amtrak.

Trying to transform the reputation of a brand and take it outside of a successful niche is often a recipe for disaster. Iconic food brand Quaker Oats learned this the hard way when it acquired fruity juice drink brand Snapple for $1.4 billion in 1994.

Not only did Quaker Oats overpay for Snapple, it then launched straight into a marketing campaign that aimed to encourage restaurants and supermarkets to stock Snapple. The problem was Snapple was firmly established as a ‘convenience’ drink designed to be quickly grabbed at corner stores and gas stations. After this blunder, Quaker Oats found it tricky to recover and three years later it sold Snapple at a loss for just $300 million.

In 1998 toy manufacturer Mattel acquired educational software company The Learning Company for $3.8 billion. As the home of iconic brands such as Barbie, Hot Wheels and Fisher Price, Mattel’s aspiration was to bring its beloved big names into the emerging interactive games market. The deal went ahead despite analysts saying it was a bad move.

After just a few months, the merger created a high volume of product returns as stockists failed to sell products, which resulted in masses of unsold units clogging up warehouses. These failures led to a big departure of executive level staff members and resulted in an eye-watering 1999 calendar year loss of $206 million. However, Mattel acted fast and ditched The Learning Company less than a year after buying it and remains one of the biggest toy retailers to this day. 

When German car brand Daimler-Benz (the manufacturer behind Mercedes-Benz) merged with American automobile manufacturer Chrysler for $36 billion in 1998, many thought it was a smart move that would solidify both brands as a formidable presence.

However, Daimler-Benz’s luxury reputation didn’t align with Chrysler’s desire create affordable vehicles for drivers on a lower income. The merger floundered further when issues with language barriers and differences in management styles could not be reconciled and Chrysler was making losses. So finally, in 2007, Daimler-Benz sold Chrysler to Cerberus Capital Management for $7.4 billion in order to cut ties with the US company once and for all. 

Nowadays, Mark Cuban (pictured) is recognized as a successful billionaire, owner of basketball team the Dallas Mavericks and one of the ‘shark’ investors on TV’s Shark Tank. Back in the 1990s, however, he was merely known as the founder of broadcast.com, an online radio and TV site that enticed Yahoo! to part with $5.7 billion as it looked to expand its brand. 

However, Yahoo! soon regretted this acquisition. Slow internet speeds and a limited offering of watchable content (think obscure vintage TV shows no one cared about) meant that broadcast.com quickly floundered. This resulted in the firing of employees who put together the deal and the closure of the site. Many analysts also claim it was this misstep that started a downward curve for Yahoo!

Some failed mergers seem successful at first and only develop problems years down the line. This was the case when Deutsche Bank’s CEO Rolf Breuer (pictured) acquired Bankers Trust for $10.1 billion in 1999, which initially appeared to be a sound investment.

Bankers Trust was an organization that specialized in offering loans to businesses such as then real estate developer Donald Trump (pictured in 1999 with his wife Melania) that other banks wouldn’t touch. It’d also received a lot of press attention for a recent corporate accounting fraud scandal, which had landed the firm with three felony charges and a $63 million settlement to pay. But Deutsche Bank saw a bigger picture and felt this deal would finally allow it to compete with big Wall Street banks. At the time experts likened the risky deal to “going all in at the casino”, but after Deutsche Bank's purchase it quickly faded into the background. And 16 years later Deutsche Bank was finally forced to write off billions from the acquisition. 

Yahoo! also made another misstep in 1999 when it acquired a pioneering web-hosting service called GeoCities, which was popular in the 1990s and founded by David Bohnett (pictured). 

When Yahoo! purchased GeoCities, both brands were at the top of their game with Yahoo quickly becoming a leader in the tech industry and GeoCities hosting millions of live sites which were sorted into categories based on their contents. The problem was that Yahoo! didn’t seem to know what to do with GeoCities. So it did… nothing. Ten years passed with still no developments, which meant Yahoo!’s $3.6 billion investment had been worthless. So even though Geocities was still home to over 40 million pages it was shut down in the US in 2009. GeoCities Japan, however, was kept going until 2019.

The early 2000s were known in the business world as the years of the ‘dot-com bubble’ with online start-ups and internet companies all competing to make it big. That’s why when multinational mass media and entertainment conglomerate Time Warner purchased AOL for $165 billion in 2000 it was seen as a smart move by CEO Gerald M Levin (pictured). 

The vision behind the acquisition was that AOL would help to bring Time Warner into a new era of internet culture, chat rooms and instant messaging. But it ended up being a huge fail. The companies had vastly different structures and cultures that didn’t mesh well together. And when the dot-com bubble burst due to overvalued stocks, with many internet companies going bust, the entire industry suffered. Overall, AOL Time Warner reported a whopping $99 billion write-down in 2002, which led to the two brands parting ways in 2009. Many experts still consider this merger as one of the worst business deals of all time.

Another casualty of the ‘dot-com bubble’ was the 2000 deal between Spanish telecom company Terra Networks and US search engine and web portal Lycos. This acquisition offers a great example of an established brand enticed by the vanity metrics of an exciting new brand. At the time, Lycos was flying high with 50 million users and 175 million page views per day, which swayed Terra Networks to part with $12.5 billion in a risky stock-for-stock deal.

However, there was one thing Terra Networks overlooked: Google. Having soon established itself as the world’s most dominant new search engine, there was simply no room for brands such as Lycos to compete. So in 2004 Terra Networks parted with Lycos for a disappointingly low $95 million.

The year 2003 saw telecommunications and networking conglomerate Cisco lose big when CEO John Chambers (pictured) acquired data networking hardware brand Linksys for $500 million. The deal initially seemed like a bright idea, with Cisco free to focus on selling to big companies while Linksys could take care of selling wireless routers to the small business and home demographic. But things didn’t quite work out. 

Almost immediately Linksys was hit by a new wave of competitors and the market became oversaturated. A further blow came when internet service providers began to provide customers with routers, essentially eliminating the need for companies such as Linksys. So when quality began to dip in 2013, Cisco took the opportunity to sell Linksys to Belkin for a loss in order to cut ties.

In 2005 online marketplace eBay had the brainwave to purchase telecommunications brand Skype for $2.6 billion. The idea was that eBay sellers could use Skype to make calls, which would improve relationships between customers and sellers. 

However, eBay failed to take into account that email was a more effective, quicker and safer way for users to communicate. Over the next four years, eBay went through four different Skype management teams to try to get the merger to work, which resulted in a culture clash and toxic atmosphere. To try and recover from this failure, eBay eventually sold 65% of Skype for $1.9 billion in 2009. Skype was later bought by Microsoft for $8.5 billion in 2011, but in 2019 it announced it was closing the business arm of Skype and corporate users would have to transfer over to Microsoft's Teams by July 2021. Skype for personal use will remain active.

Remember Myspace? Often referred to as an early ancestor of Facebook, the original social networking site was purchased for $580 million by News Corp, a mass media and publishing company owned by famous media proprietors the Murdoch family (pictured is patriarch Rupert Murdoch). 

At first, this was widely regarded as a way of ‘saving’ Myspace just as Facebook came onto the scene. But News Corp's first mistake was to try and rebrand Myspace as an entertainment hub, using it to push content from broadcasting company the Fox Corporation (also owned by the Murdoch family). Then when Myspace failed to reach its sales targets, News Corp initiated a mass firing of employees. In 2011 News Corp sold Myspace to Specific Media, an investment company owned by popstar-turned-entrepreneur Justin Timberlake, for a paltry $35 million. 

When two brands are from the same industry, yet each have something unique to bring to the table, this can be the perfect opportunity for a great merger. But when Sprint and Nextel joined forces in 2005 for $35 billion, it was a huge letdown. Nextel was known as a more corporate business-focused brand while Sprint catered to consumers. And so combining their customer bases proved tricky.

The last straw came when many top-level Nextel executives departed after the merger, leaving the new super-company with a lack of structure and support to make the deal work. Things limped on until 2013 when Nextel’s nextworks were shut down for good amid losses of billions.

It seems 2005 was quite the time for business deals destined to disappoint as it was also the year aging retail giants Kmart and Sears came together. However, this idea did start out with some savvy, smart-thinking intentions. Noticing how the retail world was changing and realizing it was losing out to competing retail outlets such as Target and Walmart, Kmart decided to purchase troubled department store chain Sears for $11 billion, with both being led by Kmart Holding Corp. chairman Edward Lampert (pictured).

However, since coming together Sears has continued to hemorrhage money, more than $7 billion to be exact, and when Kmart experienced unprecedentedly awful Christmas sales figures in 2011 it had to resort to mass closures. Matters got worse in October 2018 when Sears filed for Chapter 11 bankruptcy, listing $6.9 billion in assets but $11.3 billion in liabilities. What followed was a wave of hundreds of store closures and the threat of liquidation. And while Lampert later received court approval to buy the struggling company for $5.2 billion in February 2019 through his hedge fund ESL Investments and keep it running, many have accused his business decisions as being what led to the decline in the first place. The deal meant that over 400 stores stayed open, however this was only temporary and soon more Sears stores started closing, and when the coronavirus pandemic hit that accelerated. Today, there are only 23 stores left in the US.

Acquisitions often fail due to spiralling costs and unforeseen expenses, which can have a terrible effect on what initially seems like a profitable deal. This is exactly what happened when information technology and communications giant Toshiba purchased American nuclear reactor manufacturer Westinghouse Electric for $5.4 billion in 2006. 

After paying $4.2 billion to Westinghouse in order to expand into the nuclear energy business, Toshiba failed to see a return when mounting construction costs and delays led to catastrophic financial losses. Toshiba was ultimately forced to write off $6.3 billion in losses and humiliatingly had to declare bankruptcy at Westinghouse, with the media referring to the deal as a ‘scandal’. Pictured is Westinghouse’s Co President Danny Roderick answering questions during an uncomfortable press conference at Toshiba’s headquarters in 2015. 

It may seem hard to believe, but this deal failed spectacularly primarily because two people could not get on. The infamous merger between French handset brand Alcatel and American telecommunications company Lucent was also victim to cultural clashes and hindered by a super-complex deal structure.

The 2006 deal cost a massive $13.4 billion but ended acrimoniously when Lucent CEO Patricia Russo and former Alcatel CEO Serge Tchuruk (both pictured) both resigned after failing to see eye to eye. The merged company then struggled on for years until it was snapped up by Nokia in 2016. 

An internationally-renowned bank acquiring one of the most respected financial advice brands in the world seems like a pretty safe bet. Unless that mergers occurs during one of the worst financial catastrophies in history, which is exactly what happened to Bank of America when it acquired wealth management and financial service provider Merrill Lynch for $50 billion in 2008. Bank of America’s CEO Ken Lewis (pictured) had wanted to work with Merrill Lynch for years but the timing couldn’t have been worse. The 2008 financial crisis erupted, destroying any chance of the merger’s success. Worse was to come when Merrill Lynch’s CEO John Thain departed mere months after the acquisition was announced. 

Bank of America stock fell 78% in the aftermath and the federal government had to offer a ‘rescue package’ comprised of a $20 billion cash infusion and guarantees on $100 billion of troubled assets in order to save the bank. Pictured are Bank of America board members testifying at a Government Reform Committee hearing to determine what went wrong with the acquisition. 

Acquiring Merrill Lynch wasn’t the only terrible decision Bank of America made in 2008. That same year it also bought mortgage lender Countrywide Financial for $4.1 billion. Pictured is Countrywide’s CEO at the time, Angelo Mozilo. Ordinarily this would have been an ideal way to grow the Bank of America brand, but in the wake of the 2008 mortgage and housing crisis it spelled disaster. 

Issues with the deal ranged from real estate losses to industry penalties that Countrywide received due to its lending practices, all stemming from the financial crisis that the entire world was reeling from. Altogether Bank of America lost $40 billion from its acquisition of Countrywide and it’s often referred to as one of the worst deals ever made in American finance.

How do two popular chains take on McDonald's to become the US’s biggest fast food brand? They team up to become one big fast food superbrand. Or at least that was the idea when the billionaire owner of sandwich chain Arby’s, Nelson Peltz (pictured), bought burger brand Wendy’s for $2 billion in 2008.

The merger was created to help both brands cover more ground and unseat bigger fast food chains in order to secure industry dominance. But this achievement never materialized and sales began to slow down for both brands. So much so that Arby’s offloaded Wendy’s three years later by selling it to a private equity firm called Roark for an undisclosed amount.

Founded in California in 2005 by husband and wife Michael and Xochi Birch (pictured), Bebo was a social networking site that soon overtook Myspace's popularity in the UK. It reached a peak of 40 million users when AOL bought the site for $850 million in 2008, a deal that some commentators at the time saw as overpriced.

Due to a lack of clear strategy from AOL, Bebo soon flopped after being overshadowed by rival social networking site Facebook. By 2010 AOL had given up on it and sold Bebo to investment consortium Criterion Capital Partners for between $2.5 million and $10 million. Criterion Capital Partners brought original founder Michael Birch on board as a strategic advisor, but it didn't work. In 2013 Birch bought back the website he created with his wife for $1 million in a bankruptcy auction. Birch sought to reinvent the social network, making a foray into video streaming software, a new arm of the business which was later acquired for $25 million in June 2019 by Amazon-owned gaming platform Twitch. During that time the social networking site bebo.com went quiet, but now, seven years after Birch bought back his company, a completely new version of the Bebo website is set to launch later this month. A completely fresh start, as all content from its life as a 2000s social network has been lost, it remains to be seen if it become popular again.

California-based multinational technology conglomerate Cisco has another fail under its belt. In 2009 it paid $590 million for digital camera brand Pure Digital, which initially seemed like a great way to expand Cisco’s consumer product department. However, Pure Digital was primarily known for its Flip HD digital camera, so when companies such as Apple started to integrate better-quality cameras into sleek tech such as the iPhone (pictured), Pure Digital was left behind.

Cisco then took the drastic move of effectively "killing off" the range of pocket cameras (pictured). This left experts scratching their heads as to why Cisco would close such an expensive deal with Pure Digital in the first place, with many calling the failed acquisition "wasteful". 

Game developing business Zygna is known for creating popular Facebook games such as Farmville. But in 2012 it had its eyes on another gaming company, OMGPOP, which had garnered a lot of attention due to its app Draw Something, a viral hit for smartphone users worldwide. 

But after acquiring OMGPOP for $210 million, Zynga, which was founded in 2007 by Mark Pincus (pictured), failed to see a return on investment. Draw Something became old news, with its active users dropping from 15 million to 10 million almost immediately after the merger. In a panic, Zynga began to take inspiration from other popular online games in order to boost profits, which led to allegations of copying. The last straw came in the form of "sweeping layoffs" with hundreds of staff members losing their jobs. Zynga then effectively shut down OMGPOP a year after purchasing it.

In 2013, now-aging web titan Yahoo! attempted to become more youth-friendly when it acquired teen-centric blogging site Tumblr for $1.1 billion. But while Yahoo! initially wrote a post on Tumblr vowing not to mess things up that’s exactly what happened.

Yahoo! CEO Marissa Mayer (pictured) allegedly set unrealistic revenue goals and had to write down $482 million in impairment costs from Tumblr in 2016 alone. Yahoo! also had to contend with a mass exodus of employees due to a culture clash and ended up having to write off total losses of $712 million. Verizon, which bought Yahoo! in 2015, eventially sold Tumblr for less than $3 million in 2019.

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