Value Creation through Technologies and Innovation: A Study of AOL Hostile Takeover Time Warner

Abstract

The popularity of mergers and acquisitions as a tool of corporate strategy has soared over the last few decades. This paper reviews the AOL Time Warner merger and analyses how it creates significant synergies for both companies. It is also a showcase that demonstrates how customers benefit from the merger with high-speed Internet access, cheap price and the convenience of one bill customizable packages. This paper concludes that the measurement of benefits from takeover is complex, but the understanding of value and what drives it - is critical to the management. The unprecedented benefits will reach not only company and customers but also reach the industry to speed with the rest of the world in terms of the technological revolution, E-commerce and innovation. More importantly, the motivation for technology improvement and innovation should address the value creation and the goal of building shareholder wealth.