The 2007 battle for ABN AMRO, in which an RBS-led consortium outbid Barclays with an offer of about €70-71 billion, shows how bidding frenzies can leave the winner dangerously overexposed when conditions turn: RBS’s own chairman later called it “the wrong price, the wrong way to pay, at the wrong time and the wrong deal,” and the bank ultimately needed a £45 billion bailout. Tyson Foods’ 2014 acquisition of Hillshire Brands offers a more recent illustration: After a short but intense bidding war with Pilgrim’s Pride, Tyson’s winning $63-per-share all-cash bid — valuing Hillshire at roughly $8.5 billion, about a 70% premium to its pre-bid price — led analysts to warn that “bidding wars can sometimes leave casualties” and to estimate that Tyson destroyed around $2 billion of value versus a fair value closer to $47 per share, even after synergies. AT&T’s 2015 acquisition of DirecTV for about $48 billion illustrates how weak integration planning and shifting industry dynamics can undermine the deal thesis — cord-cutting and execution challenges contributed to a $15.5 billion impairment of its premium TV unit and a later spin-off of DirecTV into a separate joint venture.
Author: Steven Guglielmi
Published at: 2025-12-08 22:15:57
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