Comprehensive due diligence is essential to any successful M&A deal. But getting a complete and transparent view of the financial, operational and cultural characteristics of an acquisition target isn’t always easy. Some of the biggest brands in the world even make mistakes.
Last year, HP’s $11.1 billion acquisition of Autonomy stole the headlines for all the wrong reasons. In November, HP announced disappointing earning results, taking a $8.8 billion write-down. The write-down was largely due to alleged accounting “improprieties” at Autonomy. HP claimed that certain people at Autonomy willfully misled investors to believe that their growth and sales were stronger than they actually were, and HP therefore overpaid. However, what’s most surprising is that HP failed to notice the accounting errors for close to a year; errors which were clearly overlooked during the due diligence process.
But HP is not alone. Countless Due diligence mistakes have been made by other well-known companies over the years.
We’ve brought together a list of the Top 10 worst due diligence blunders to demonstrate what happens when the stakes are high and the due diligence process breaks down.