Business mergers are mergers that occur when two businesses decide to come together and share resources, but it often refers more to one company taking over the ownership of another. While some of these mergers are successful and lead to big profits, others are a little less successful. You might expect two companies that both sell computer components to merge as the market changes, but many people didn’t expect some of the most shocking mergers in American history.
Sirius and XM
Satellite radio was a hot thing when first introduced, and even today, you have a hard time finding a new car or truck that doesn’t come with satellite radio already installed. Sirius and XM were the two biggest satellite providers during the early days but eventually decided to merge their resources to reach more customers. The FCC initially denied the merger because of regulations it established early on, but after several years, the two companies came together and watched profits soar.
Sears and Kmart
Sears started life as a catalog company that shipped catalogs to shoppers and let them buy everything from clothing to house plans from home. The company later opened anchor stores in malls across the country. Kmart was more of a shop for budget shoppers and competed alongside Walmart, which made the merger of Kmart and Sears pretty shocking. Sears even allowed its credit card customers to use their cards when making purchases at Kmart. The merger wasn’t quite as successful as some hoped, and Sears blamed its later profit loss on that merger,
Sprint and Nextel
The Richest lists the merger of Sprint and Nextel on its list of the worst business mergers of all time. Nextel had millions of customers, was the primary sponsor of NASCAR and patented push button talk, while Sprint wanted to enter the cell phone market. Instead of designing and building its own phones and communications systems, it acquired Nextel and immediately changed the company’s name. The Richest points out that many top executives left the company and that Sprint experienced financial problems in the coming years, making it one of the worst mergers.
Yahoo and Broadcast.com
Many people know billionaire investor Mark Cuban today for his appearances on the hit show “Shark Tank” and as the owner of the Dallas Mavericks, but after graduating college, he launched the website Broadcast.com. Though originally launched as a site for Indiana basketball fans, the site later offered social networking features and streaming of different sports shows and other programs. Yahoo, which wanted to compete alongside Google, acquired the site and the full company for more than $5 billion. Instead of encouraging people to use Yahoo, it alienated its original fans and led to Yahoo shutting down the company.
Facebook and Instagram
While both Facebook and Instagram reach millions of users, few ever thought the two companies would merge. Facebook allows users to write posts, share status updates, upload videos and add photos to their accounts, while Instagram focuses more on photo sharing than other aspects of social networking. Facebook eventually acquired Instagram for $1 billion but allowed the two sites to operate independently. Though some users share Instagram posts on Facebook, most use the sites separately. The success of that merger led to Facebook acquiring other apps, sites and companies.
One of the most successful mergers in history is the merger of Disney and Pixar, which increased profits and led to a series of hit films, but not all mergers are as successful. Some of the most shocking and surprising business mergers in history led to companies disappearing, profit losses and even shutting down.
