AOL Time Warner Outline_FINAL

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  • 8/8/2019 AOL Time Warner Outline_FINAL


    1. Introductiona. Timeline of Events

    2. AOL Company Overviewa. Company Historyb. AOL Business Modelc. Market Situation Prior to Merger

    3. Time Warner Company Overviewa. Company Historyb. Time Warner Business Modelc. Market Situation Prior to Merger

    4. AOL Time Warner Mergera. Reasons for Mergerb. Proposed Synergiesc. Terms of the Merger Agreementd.

    Market Reaction to Merger

    5. AOL Time Warner Post-Merger (Descriptive)a. Financial Performanceb. Issuesc. Failure to Realize Synergies*

    Research Questions:

    6. AOL Time Warner Merger: Was the Merger a Mistake?a. Value Destruction

    i. Little/no synergiesii. Revenues fell, costs increased

    iii. Goodwill impairmentiv. SEC/Shareholder Lawsuitsv. Debt ratio not optimal

    b. Erosion of Stakeholder Valuei. Shareholders

    ii. Debt holdersiii. Management and employees

    c. Lessons from Merger7. Was the Split between AOL Time Warner Overdue? Post-merger perspective i.e.

    from 2001 onwards

    a. When did negative signals start to surface?i. Declining revenue, corporate culture clash, falling share price, highkey management turnover, integration problems, large-sell off by

    strategic investors

    b. Management reaction to problemsc. They took a long time to respond to problems and business changes; slow in

    making fast decisions

    8. Lessons from Merger (Refer to Lecture Notes, Management Overconfidence can leadto disastrous outcomes)

  • 8/8/2019 AOL Time Warner Outline_FINAL


    9. Conclusion