The acquisition of Autonomy by computing giant, HP amid serious concerns over the merger conditions, is now being seen as a wrong decision and some are also comparing it to the disastrous acquisition of Time Warner in 2000 AOL.
HP had accused Autonomy is indulging in misleading accounting practices during the merger negotiations between the two companies in 2011. Autonomy, which was established in
1996, grew from its origins to become one of Europe's largest and fastest-growing software companies. It was acquired by HP in October 2011 for more than $11 billion following negotiations between the two companies.
CEO Meg Whitman claimed during a conference call that former Autonomy used misleading accounting and also kept key information secret during its negotiations with HP about the merger in 2011. HP and former Autonomy executives have exchanged in a serious and heated exchange of comments.
Mr. Lynch wrote an angry letter to HP asking the company to explain its highly damaging allegations. HP had revealed last Tuesday in a statement that its "internal investigation and forensic review uncovers accounting improprieties, misrepresentations and disclosure failures in Autonomy financial statements prior to 2011 acquisition by HP."
The company has announced a non-cash impairment charge of $8.8 billion in the fourth quarter relating to the Autonomy acquisition. It said that about $5 billion of that is linked to accounting improprieties, misrepresentation and disclosure failures by Autonomy during the negotiations between the two companies.