M&A WAR STORIES - The Good, The Bad and The Ugly

FRED THE SHRED AND A RIGHT ROYAL M&A DISASTER

June 08, 2021 Robert Heaton & Toby Tester
M&A WAR STORIES - The Good, The Bad and The Ugly
FRED THE SHRED AND A RIGHT ROYAL M&A DISASTER
Show Notes

In the past weeks, we've been reviewing some thew worst M&A disasters in corporate history and this week I think Toby has found one of, if not THE worst M&A disaster in corporate history.

This was Royal Bank of Scotland's disastrous takeover of Dutch Bank, ABN Amro in 2007 and not only was it a massive disaster for Royal Bank of Scotland, it almost brought the UK economy to its knees. Bottom line, it had ALL the hallmarks of a recipe for guaranteed disaster:

  1. An egocentric bully in the CEO's chair with a penchant for high risk acquisitive growth
  2. A lack of strong M&A process and governance
  3. A compliant board that simply waved through the CEO's desires without proper review and challenge. 
  4. Timing that aligned nicely with the Global Financial Crisis (GFC)
  5. AND the biggest banking takeover in corporate history

In summary, these dot points make for an explosive outcome but the lesson here is that these traits are universal for any M&A transaction irrespective of industry, size or geography and it is a Chairperson and the Board's responsibility to ensure proper process, strong governance and a balance of Board power to ensure such transactions receive proper and thorough consideration.