Theorganisational challenges were also immense, not least because whereas Sprintwas split into divisions according to the type of customer, Nextel was splitaccording to business function, each covering the full range of customers.Combining these approaches as an initial compromise has not worked well, butfavouring one company’s structure will provide an inevitable source ofresentment.The Justice Department has spoken, and although the FCC has suddenly begun tohave doubts, it seems highly probable that the AT&T-BellSouth merger willfollow the same path as its predecessors and receive all official blessingssubject to certain not very stringent conditions. Not surprisingly, the other wirelessoperators are also intent on speeding up their own networks using EV-DO andHSDPA as appropriate, although their WiMAX strategies are far weaker.So was the takeover destined to fail from the off? AOL had arrogant and aggressive employees while Time Warner had corporate and staid employees.Sprint-Nextel merger took place in 2004, with what they termed as equal merger though in actual sense Sprint was purchasing Nextel. Although this process has been extensively and successfully used in company expansion in a number of cases, mergers have not been always successful. The market of cell phones in the United States is constantly increasing and the 162 million users will increase in the next few years. Anatomy of a merger: Sprint Nextel. Not surprisingly, Sprintinitially preferred the latter option, relegating the Nextel name to asubsidiary role. AOL on return would benefit by gaining access to cable systems of Time Warner, resulting to additional content offered to its 27 million subscribers and innovative broadband ability. The results for 2006Q3 subsequently revealed thatyear-on-year profits had fallen by over 50 per cent, partly due to costsincurred in the spin-off of Embarq, its local fixed-wire operations, in May, butalso due to the loss of 200,000 post-paid customers.Emerald Group Publishing LimitedNevertheless, Sprint’s options were very limited. The memorandum will detail: a history of the company, their financial difficulties, a SWOT analysis, possible solutions for the failing company, and prediction for the future state of the company. Moresignificantly, perhaps, Sprint Nextel has been embroiled in long-standing issuesto do with attempts to trade spectrum owned by the former Nextel in the 850 MHzband, which was interfering with emergency services” communications, withspectrum in the 1,900 MHz band.Naturally, all is not doom and gloom. By 2007, only a few Nextel executives remained. However, it should not be forgotten that century-old Sprintwas developed as a fixed-wire operator and hence its management had largely cutits teeth in that line of business. This paper focuses on analyzing two cases of failed mergers, establishing various aspects that contribute to merger failure and what can be done to enhance successful mergers.Another major reason for the merger failure is that the merger was secretly done between the directors of the two companies.
Sprint Nextel merger was measured based on customers turnover. Sales increase demonstrate trend to success while sales decline demonstrates operational failure which would require to be addressed. The merger was anticipated to provide Time Warner the aptitude for content digitalization and reach novel online audience. Thus the company used head count metrics to measure its progress where a huge decline was noted.There are a number of metrics that can be used to measure merger progress in any situation.
If so, the restructuring ofthe US mobile communications sector will, one imagines, have run its course.Since the two companies were conjoined, the share price of the new operator– it is the only one of the “big four” mobile operators with apublic listing – has dropped by over 30 per cent from a high of $24.40to a recent low of $16.20. The two other metrics that can be employed include purchase metric and assets reduction metrics. Nevertheless, the two companies experienced incompatibility in their infrastructure and corporate culture (McQuade & Khanfar, 2010).There are different metrics that can be used to measure merger progress. By 2008, the company had written down 80% of the value of the Nextel, confirming the widely held belief that the merger had been a failure.