Lesson 6 of 6
Risks and public case studies
8 min
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Most widely repeated M&A failure statistics have no traceable source, so this lesson uses public records instead: regulator notices, court filings, SEC filings and reporting on named programs. The point is not to collect horror stories. Each case shows a failure mode that a quality gate could have caught, and the lesson ends by turning them into Contoso's Wave 2 risk register and go/no-go criteria.
Six public cases
| Case | What happened (as reported) | Failure mode |
|---|---|---|
| Asda leaving Walmart's systems (2021–2025) | After its sale by Walmart, Asda moved to its own SAP S/4HANA, separating more than 2,500 legacy systems. Its chair called the problems self-inflicted, citing poor integration, insufficient testing and a lack of capacity planning. The initial budget of £189 million rose to a reported £1.224 billion in total. | End-to-end testing and capacity at new volume |
| Neogen and 3M Food Safety (fiscal 2024) | Neogen's 10-K says implementing a new ERP and beginning the exit of transition distribution agreements with 3M led to shipment delays and a backlog of open orders. | TSA exit and ERP cutover in the same period |
| TSB (2018 migration, 2022 fines) | After separating from Lloyds and being bought by Sabadell, TSB migrated to a new banking platform; UK regulators fined it £48.65 million for failing to organize and control the migration adequately. Not SAP, but the clearest regulator record of an M&A migration failure. | Governance and oversight of the program and its suppliers |
| WK Kellogg spin-off (2023) | Its Form 10 warned that implementing a new ERP before the end of the TSA could disrupt operations and internal control over financial reporting. | Controls risk from ERP change after separation |
| XCL Resources and others (2025) | Record $5.6 million FTC gun-jumping penalty, including control over the target's ordinary operations before close. | Pre-close conduct |
| National Grid US (2012 go-live) | An SAP go-live in the aftermath of Hurricane Sandy was followed by payroll errors and thousands of unpaid supplier invoices; the integrator settled for $75 million in 2018 without admitting wrongdoing. Not an M&A program; shown for go-live under external pressure. | Go/no-go decided by the calendar |
Public cases with their sources in the course list; read the originals before quoting them.
From failure modes to quality gates
Each failure mode maps to a test or a decision that has to happen before a specific milestone. A gate that exists only as a slide does not protect anyone; it needs an owner, evidence and a date in the integration plan. Notice that several gates are not technical: the go/no-go criteria and the separation of TSA exit from cutover are governance decisions, and they fail when schedule pressure is allowed to override them.
Read the cases with care. The Asda numbers come from press reporting of company statements and annual reports; Neogen and WK Kellogg are SEC filings; TSB rests on the UK regulators' final notices; the MillerCoors lawsuit over an SAP rollout tied to a joint-venture consolidation was settled, so its claims remain allegations and are left out of the table. When you use a case in a steering deck, cite the primary source and say what it proves and what it does not. A filing that links an ERP change to shipment delays shows that the risk is real; it does not tell you which test would have caught it.
Two patterns stand out for an acquirer like Contoso. First, the buyer's own business is exposed: Asda's and Neogen's problems hit existing customers, not just the acquired unit. Second, the hard deadlines are rarely technical. A TSA end date, an announced customer date or a regulatory filing date pushes the program toward a go-live it has not proven. The remedy is to make those dates inputs to the plan from the start, with enough rehearsals before them, rather than constraints discovered at the end.
Contoso's Wave 2 risk register
| Risk | Signal | Mitigation and gate | Owner |
|---|---|---|---|
| Existing company codes affected by the 1910 load | Changed balances or document flows in 1710 or 1810 after a mock | Regression and trial balance comparison for 1710 and 1810 after every W2 mock | Priya |
| CFDI invoicing fails on day one in SAP | Rejected or unstamped invoices in the mock | End-to-end CFDI tests in W2 Mock 2 and 3 with Lucía's sign-off | Lucía |
| Batch windows overrun at merged volume | MRP or payment runs longer after plant 1910 is added | Volume test of MRP, payment and period-end jobs before the dress rehearsal | Sam |
| Legacy history unreachable after TSA exit | No tested access path to closed CFDI files | Read-only access and archive retrieval tested before April 30, 2027 | Dan |
| Pressure to go live before the dress rehearsal is clean | Open severity 1 defects at the dress rehearsal | Go/no-go criteria signed before the dress rehearsal; decision group chaired by Grace | Grace |
An extract from Contoso's Wave 2 risk register (illustrative course data).
What would you do?
Two weeks before the Wave 2 weekend, the W2 dress rehearsal finishes inside the 40-hour window, but CFDI stamping fails for 3% of test invoices and the cause is not yet known. The CFO says the date was announced to Monterrey's customers and must hold. What should Grace's decision group do?
- Use public records, not untraceable statistics, to explain M&A risk.
- Recurring failure modes: thin end-to-end testing, no capacity planning, TSA exit during cutover, data leakage, weak governance and calendar-driven go-lives.
- Turn each failure mode into a gate with an owner, evidence and a date.
- Keep the buyer's live company codes in every regression cycle.
Check your understanding · not graded
Lesson check
1. Which failure modes did Asda's chair cite for its separation problems?
2. What does Neogen's SEC filing link to shipment delays?
3. Why should go/no-go criteria be signed before the dress rehearsal?
4. Why is TSB relevant to an SAP M&A course although it is not SAP?