Using the relevant M&A Disaster article (http://www.investopedia.com/articles/fi

Question

Using the relevant M&A Disaster article (http://www.investopedia.com/articles/financial-theory/08/merger-acquisition-disasters.asp),

a) Which M&A transaction had the lowest IRR (not loss on investment)?

b) What was the approximate IRR (you can just use month and year)

AOL/Time Warner (from initial purchase price to remaining value after $99B write-off in 2002)

Here is the artcle:

America Online and Time Warner

The consolidation of AOL Time Warner is perhaps the most prominent merger failure ever. Time Warner is the world's largest media and entertainment corporation, with 2007 revenues exceeding $46 billion.

The present company is a combination of three major business units:

Warner Communications merged with Time, Inc. in 1990.

In 2001, America Online acquired Time Warner in a megamerger for $165 billion - the largest business combination up until that time.

Respected executives at both companies sought to capitalize on the convergence of mass media and the Internet. (Read about how the Internet has changed the face of investing in The History Of Information Machines.)

Shortly after the megamerger, however, the dot-com bubble burst, which caused a significant reduction in the value of the company's AOL division. In 2002, the company reported an astonishing loss of $99 billion, the largest annual net loss ever reported by a company, attributable to the goodwill write-off of AOL. (Read more in Impairment Charges: The Good, The Bad And The Ugly and Can You Count On Goodwill?)

Around this time, the race to capture revenue from Internet search-based advertising was heating up. AOL missed out on these and other opportunities, such as the emergence of higher-bandwidth connections due to financial constraints within the company. At the time, AOL was the leader in dial-up Internet access; thus, the company pursued Time Warner for its cable division as high-speed broadband connection became the wave of the future. However, as its dial-up subscribers dwindled, Time Warner stuck to its Road Runner Internet service provider rather than market AOL.

With their consolidated channels and business units, the combined company also did not execute on converged content of mass media and the Internet. Additionally, AOL executives realized that their know-how in the Internet sector did not translate to capabilities in running a media conglomerate with 90,000 employees. And finally, the politicized and turf-protecting culture of Time Warner made realizing anticipated synergies that much more difficult. In 2003, amidst internal animosity and external embarrassment, the company dropped "AOL" from its name and simply became known as Time Warner. (To read more about this M&A failure, see Use Breakup Value To Find Undervalued Companies.)

Read more: Biggest Merger and Acquisition Disasters | Investopedia http://www.investopedia.com/articles/financial-theory/08/merger-acquisition-disasters.asp#ixzz4EjqWJAH2
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Explanation / Answer

1.) New York Central and Pennsylvania Railroad

Since, company filled for bankruptancy after only two years.

2.) Based on billion dillior and taking investment present value after merger we arrive at:

It would have been appreciated if you could provide financial but based on the net i have used the said data.

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