The story of a failed takeover - Fred Goodwin, RBS & ABN-Amro

The catastrophic takeover by RBS (as part of a consortium with Banco Santander and Fortis) of Dutch banking group ABN-Amro has become a defining case study of how to mess up a deal.  Just about everything that can go wrong with a takeover did go wrong.

The takeover story is quite complex, so I’m attracted to this story narrative in the Telegraph which describes the process that RBS, driven by its subsequently de-knighted CEO Fred Goodwin, undertook to pursue its target.

There are so many vital points for students to pick up from the takeover, including:

- The absence of a clear plan for what RBS would do if/when they eventually succeeded in the bid (an unrealistic takeover integration plan)

- The impact of a dominant leader / ego on the takeover process (the deal was driven more by managerial motives rather than genuine strategic motives)

- The problems caused for due diligence (the process of investigating the target business) if a takeover bid is “hostile” (i.e. rejected by the Board of the target)

- The problem of the winner’s curse - paying for too much in a competitive auction for the target without a sensible appreciation of the true value of what you are buying

- The total failure of regulation (by the UK & European financial services regulators) and by the RBS Board (unable to resist a dominant CEO)

BUSS4 - a clash of culture and a failed takeover [24 May 2012]
Rising to the top of the milk [22 May 2012]
6 Essential M&A Cases: Tata Group buys Jaguar Land Rover [21 May 2012]
AQA BUSS4 - ‘with reference to *** plc and your own research ....’ [13 May 2012]
Takeovers and Mergers - A Casino Gamble? [12 May 2012]
Takeovers and Mergers - Vue on the Growth Trail! [12 May 2012]
Takeovers and Mergers - the failed takeover behind Clinton Cards’ Collapse [9 May 2012]
Vodafone and Cable and Wireless Worldwide [25 Apr 2012]
Vodafone takes over Cable and Wireless Worldwide [23 Apr 2012]
6 Essential M&A Cases: BA & Iberia Merge to Form IAG [23 Apr 2012]
BUSS4: 6 Essential M&A Cases [22 Apr 2012]
Easy ride for Audi? [19 Apr 2012]
Apple under fire for e-book deals [17 Apr 2012]
Takeovers and Mergers - Cost Synergies in Action at BMI [17 Apr 2012]
Takeovers and Mergers: Facebook & Instagram in News Clips [14 Apr 2012]
ResearchBuster: Acquisitions [8 Apr 2012]
BUSS4 M&A - the Benefits of Foreign Takeovers of UK Firms [7 Apr 2012]
IAG bid for BMI receives approval [3 Apr 2012]
Cosmetics gets hostile - the Coty bid for Avon [2 Apr 2012]
The Main Motives Behind Takeovers and Mergers [26 Mar 2012]
“Strategy is Choice” - Takeovers are Just One Option [25 Mar 2012]
Starbucks acquisition provides the base for entry into the juice bar market [25 Mar 2012]
Game Over? [13 Mar 2012]
Tata & Jaguar Land Rover - Culture and Strategy [11 Mar 2012]
Takeover and merger integration: lessons from the experts (GE Capital) [9 Mar 2012]
Takeover troubles - Has the Co=operative got Indigestion with the Somerfield Integration? [5 Mar 2012]
Takeovers and Mergers - tutor2u Mini Briefs [4 Mar 2012]
Takeovers and Mergers - the BUSS4 Card Game [4 Mar 2012]
Takeovers - the Indian Experience [4 Mar 2012]
Google’s takeover of Motorola Mobility is given regulatory seal of approval [22 Feb 2012]
Takeover insights: Kraft & Cadbury - The Story in Video Clips [22 Feb 2012]
Takeover insights: Kraft & Cadbury - Behind the Scenes of the Bid Defence [22 Feb 2012]
Tata and the rise of Jaguar Land Rover [22 Feb 2012]
Takeover insights: Kraft & Cadbury - Justifying the Deal [22 Feb 2012]
Takeovers and Mergers - the Language of M&A [16 Feb 2012]
AQA BUSS4 CPD Briefing Days in 2012 [16 Feb 2012]
M&A - It’s time to merge breakfast cereals with some crisps… [15 Feb 2012]
The Strategic Challenges Facing International Airlines Group - Interview with Willie Walsh [14 Feb 2012]
For sale - three sixth form colleges [13 Feb 2012]
M&A: 8 ways to make a success of a takeover [12 Feb 2012]
Q&A: What are synergies in takeovers and mergers? [12 Feb 2012]
Insights on takeovers and mergers from KPMG’s 2011 global survey [12 Feb 2012]
Takeovers - the search for cost synergies [7 Feb 2012]
Takeovers in the UK - the long-term trend [5 Feb 2012]
Glenstrata - Glencore proposes merger with Xstrata [3 Feb 2012]
Cadbury’s Law - Should UK Firms be Protected from Takeover? [2 Feb 2012]
Mastering the art of merger integration [1 Feb 2012]
Integration, integration, integration [1 Feb 2012]
BUSS4 research - some initial ideas [31 Jan 2012]
BUSS4 2012 - Mergers and Takeovers on the Business Studies Blog [31 Jan 2012]
The Guardian on Takeovers and Mergers [31 Jan 2012]
Consolidation on the cards as IAG claims deal to acquire BMI [6 Nov 2011]
High growth, fast-track firms that end on the scrapheap [2 Aug 2011]
The costs of redundancy [5 Jul 2011]
Profit, not external growth, should be the sensible strategy? [22 May 2011]
CSR - Can we trust CSR claims or is it greenwash? [12 May 2011]
Horizontal integration in action - Virgin grabs Esporta [26 Apr 2011]
Life in the chocolate factory - automation, productivity, motivation and culture [24 Apr 2011]
Strategy and bargaining power - food for thought [22 Mar 2011]
Change management - Kraft and Cadbury One Year On (FT) [14 Mar 2011]
CSR - The Case Against CSR [12 Mar 2011]
External growth - Diageo on the acquisition trail [21 Feb 2011]
Takeovers: What happens next? [16 Feb 2011]
Cadbury and Kraft One Year On - Culture and Change [12 Feb 2011]
Q&A - Why do acquisitions often fail to deliver acceptable returns? [28 Dec 2010]
Q&A - Why are acquisitions so popular as a method of business expansion? [21 Dec 2010]
Q&A - Explain what is meant by acquisitions or takeovers [21 Dec 2010]
Nestle completes takeover of Jenny Craig’s - great synergies??? [15 Dec 2010]
Kraft’s CEO on why it bought Cadbury’s [22 Oct 2010]
CEO admits “the biggest mistake in corporate history” [29 Sep 2010]
Lesson Worksheet - Business Growth Basics [29 Sep 2010]
Strategy in Action: “Buying Growth is Not a Strategy” [20 Sep 2010]
Chicken Takes Over Burger, But Where’s The Beef? [19 Sep 2010]
UK regulators move in to control online advertising [1 Sep 2010]
External growth strategy - takeovers back in fashion for large UK firms post recession [29 Aug 2010]
Kraft’s Cadbury takeover triggers management exodus [26 Jul 2010]
Is the mega-merger falling out of fashion? [7 Jun 2010]
Growth strategy - takeovers return to building supplies [3 Jun 2010]
BUSS4 - A Clash of Two Cultures [16 May 2010]
AQA BUSS4 Section B Practice Question - ITV & News Corp [7 Feb 2010]
AQA BUSS4 Section B Practice Question - Royal Bank of Scotland [7 Feb 2010]
Stakeholders in action - the Bournville demonstration [28 Jan 2010]
Teaching strategy - Cadbury and why takeovers rarely work [24 Jan 2010]
Reflections on the ‘Worst Deal in History’ – and the Best [6 Jan 2010]
Could mergers come back into fashion? [25 Sep 2009]
A Takeover with a Difference [24 Sep 2009]
Competition regulators nail the construction industry [23 Sep 2009]
Revision Presentation - Acquisitions [9 Sep 2009]
Promotion under fire as BMA calls for ban on drinks marketing [8 Sep 2009]
How to buy a £1 for 60p [1 Oct 2008]
Peston’s Hat-trick - Bradford and Bingley is Nationalised [27 Sep 2008]
Lining up a Buyer for Bradford & Bingley [22 Sep 2008]
Changing the rulebook for competition referrals [20 Sep 2008]
Lloyds HBOS is Born - One Extraordinary Day [17 Sep 2008]
HBOS on the brink of takeover [17 Sep 2008]
Bebo has been boughto [13 Mar 2008]
Now thats what i call a takeover [1 Feb 2008]
Do takeovers by ‘private equity’ firms destroy jobs? [28 Jan 2008]

BUSINESS TEACHER RESOURCE NEWSLETTER
Get first news of business teaching resources, ideas and other materials from tutor2u. Over 9,400 business teachers from the UK and around the world receive our regular teacher email newsletters. Sign up for free here!