M & A Law Prof Blog

Editor: Brian JM Quinn
Boston College Law School

Thursday, May 24, 2012

Autonomy and H-P

Hot on the heels of H-P's announcement of layoffs comes news that the former CEO of Autonomy, Mike Lynch, will be leaving H-P.  Apparently, H-P is way too bureaucratic for the former head of this start-up: 

The signs that the takeover wasn't working became clear quite quickly as the head of financing, marketing and several sales chiefs left after the takeover completed in October 2011. "It's not just Mike," said a source who knew of the departures at Autonomy.

That HP was seen as too bureaucratic is ironic, as it was for years the company seen as the Silicon Valley touchstone for innovation – producing, among others, the inkjet printer, still one of its major sources of income.

Sources close to Lynch indicated that he and his former team had been unhappy at the scale of bureaucracy after the merger.

"It's not the kind of environment that helps this sort of company," said the source. "It was a clash of cultures. Mike was previously dealing with a small, nimble atmosphere. Whereas HP is the size of a small city. It's a hard place to do what you need to do."

You'll remember that H-P's acquisition of Autonomy came at the time just before the board ousted H-P's former CEO Leo Apotheker.  Apotheker described the bid as bold. But, the company was widely criticized for overpaying for the UK company and the bid led, in part of Apotheker's ouster.  In any event, Luynch's departure points to the problem of post-transaction integration.  It's always difficult to succesfully integrate targets and it's not all that uncommon for firms to get it wrong.  Looks like H-P, in the midst of transition got this one wrong.  Not that surprising, I suppose.



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