Will Elon Musk-owned Twitter end up as a ‘deal from hell’?

UNLIKE Leo Tolstoy’s description of families, mergers and acquisitions (M&As) that end happily do so for a variety of reasons. It’s the unhappy ones that are alike. This is particularly true of M&A deals done at the top of the business cycle, when hubris runs amok, lofty valuations make acquirers sloppy with their money, and the most radical ideas are made to sound plausible.

In this category sits Elon Musk’s shotgun wedding to Twitter, once again in the offing after a judge gave both sides until Oct 28 to consummate it. Musk’s latest attempt to justify it is to describe it as a step towards a Chinese-style “everything app”. It is just as likely to go down in history as a top-of-the-market “deal from hell”.

The annals of business have colourful examples of such Stygian mishaps. Sony’s ill-fated acquisition of Columbia Pictures in 1989 occurred when Japan’s bosses thought they were invincible, the bubble economy made any price appear worth paying, and dreams of the convergence of hardware (consumer gadgets) and software (entertainment) were in the air.