Question

Explanation: In 2012, Hewlett-Packard wrote off 9 billion USD of the 11 billion USD it paid for Autonomy, a software company that it purchased one year earlier. After the purchase was completed, HP realized that the Autonomy accounting statements were not accurate. This resulted in a nearly 80 percent drop in the value of Autonomy once the accounting irregularities were corrected.
Difficulty: 2 Medium
Topic: Acquisitions and Mergers
Learning Objective: 06-01 The reasons for the failure of many diversification efforts.
Bloom's: Analyze
AACSB: Analytical Thinking
Accessibility:

Answer 1

Answer:

False

Step-by-step explanation:

A successful merger is one that sees two different companies come together as one company under one central management.

However, this was not the case with Hewlett-Packard and Autonomy merger in 2011, this resulted in a series of lawsuits seeking for damages.

This case stress the importance of proper auditing of accounts before a merger is done.