If the biggest corporate mergers were ever done on data room

Post link has been copied
Back to blog

If the biggest corporate mergers were ever done on data room

By Joe Gamse
November 9, 2022
9 min read

You only have to be an occasional follower of financial news to know that 2015 was a record-breaking year for M&A, with a total deal volume above $5 trillion and 69 tie-ups worth over $10 billion.

To give you some context, here are some of the biggest mergers in history; unsurprisingly, three of them are from last year. It’s interesting to know though whether things were different if the biggest corporate mergers ever could have been done in the data room.

Top mergers and acquisitions examples by year

Learning from others’ stories, experiences, and mistakes can help your team plan a successful merger or acquisition. So, we invite you to a tour of M&A deals covering select periods between 2015-present.

Biggest mergers and acquisitions 2015

M&A activity was high in 2015, with large transactions leading the way. Notably, activity in Asia reached a record high — almost equaling that of Europe. 

1. Dell – EMC

Dell’s acquisition of EMC, an information technology company, was the second largest merger after AOL and Time Warner, with a transaction value of $67 billion.

After the successful M&A completion, the new company was named Dell Technologies. It has become a $74 billion leader owning an expansive tech portfolio with a software-defined data center, hybrid cloud, converged infrastructure, and cybersecurity. In addition, the corporation is the sales leader in storage systems and climbed to second in the server market.

2. Heinz – Kraft Foods Group

The $100 billion merger between Heinz and the Kraft Foods Group created a new entity, The Kraft Heinz Company.

Despite the immense expectations of shareholders, such as cost reduction, colossal revenue, and global influence, it became apparent in 2019 that Kraft Heinz lacked the potential to live up to expectations. 

According to analysts, the company should have adapted to changing consumer preferences and not focused on reducing costs, slowing down the corporation’s development. Alternatively, Kraft Heinz Company could improve its business by acquiring healthy alternatives to everyday snacks like B&G Foods and Amplify.

3. AB InBev – SABMiller

AB InBev acquired SABMiller for $120 billion to rank as the largest takeover of a London-listed company and created the world’s biggest brewing company. In addition to market recognition, the new company has received many awards, including the Grand Prize at the American Lawyer Awards as a global M&A deal of the year.

The deal to merge the world’s top brewing corporations faced antitrust challenges. Thus, applications for the transaction had to be filed in about 30 jurisdictions. Most of them required legal protection to deal with antitrust regulators’ concerns about public interest and antitrust implications.

Biggest mergers and acquisitions 2018

In the first half of the year, global activity exceeded $2.5 trillion, exceeding the peak of 2015. However, the year’s second half turned out to be the worst period since 2012.

1. AT&T – Time Warner

As a result of the $85 billion merger, Time Warner merged with AT&T combining its content with the world’s most efficient telecommunications network. However, this deal is also known for the Ministry of Justice filing an appeal in court, subsequently denied, challenging its approval. Thus, President Trump expressed his fears, believing the combined company could threaten the consumer by controlling market prices.

Although the parties trudged through a lengthy court battle, finally leading to a successful merger, AT&T spun off its assets three years later. AT&T found it better to team up with Discovery to better align with people’s viewing habits. Consumers were switching from pay TV to online streaming.

2. Walt Disney – Twenty-First Century Fox

The $71.3 billion deal was an opportunity for Disney to become an even bigger giant in the entertainment industry and gain a stronger position to compete with Netflix.

In addition to Fox characters, such as the X-Men and the Fantastic Four, Disney acquired Fox television networks, National Geographic Partners, and FX Networks.

With the deal completed, Disney brought the new Fox acquisitions into the Disney family, moving The Simpsons to the Disney+ streaming service.

3. Meredith Corporation – Time

The $2.8 billion merger between the mass media corporation Meredith and publishing powerhouse Time had several goals. They included increasing readership, expanding Meredith’s reach to include millennials, and increasing the number of monthly unique visitors to the site.

Biggest mergers and acquisitions 2019

Although overall M&A activity started strong, the situation worsened over the course of the year. Nevertheless, with decreasing valuations and political uncertainty, dealers managed to cope with increased volatility.

1. United Technologies – Raytheon 

United Technologies Corporation and Raytheon Company, on an all-stock merger of equals, created a corporation worth $121 billion.

This deal was considered one of the largest mergers in the aviation industry due to a complementary portfolio of aerospace and defense technologies.

2. Salesforce – Tableau Software

When Salesforce failed to acquire LinkedIn, it continued to expand products and services beyond its CRM solutions.

Therefore, Salesforce acquired Tableau, which specializes in data visualization and has several large clients from the Fortune 500. The cost of the transaction was $15 billion.

3. Bristol Myers Squibb – Celgene

The $70 billion merger of these two companies built a giant pharmaceutical company. Thus, the new corporation has found efficient ways to address the needs of patients suffering from cardiovascular, immunological, inflammatory, and oncological diseases. 

Under the deal, Bristol Myers Squibb shareholders received a 69% stake while the target company’s shareholders were expected to own the rest.

Biggest mergers and acquisitions 2020

The ongoing trade war between the United States and China because of COVID-19 caused uncertainty in the global economy. Consequently, M&A activity has been gradually declining. However, despite these difficulties, some significant deals still took place.

1. AMD – Xilinx

When AMD announced its $35 billion acquisition of Xilinx, M&A activity in the semiconductor market was on the rise. 

Xilinx, specializing in programmable processors, helped AMD compete with Intel. Another benefit is that the parties combined their forces of world-class engineers and knowledge.

2. Analog Devices – Maxim Integrated

Analog Devices closed a $20 billion deal with Maxim Integrated to expand offerings to the automotive and industrial markets.

The deal created a new competitor for Texas Instruments, with a customer base of 125,000 and about 50,000 products. In addition, another $9 billion in annual revenue expanded the company’s presence in factories and strengthened its position in the automotive sector. 

3. Teladoc – Livongo

The merger of two big virtual care organizations cost Teladoc $18.5 billion in cash and stock to improve consumer healthcare worldwide.

One of the strategic goals of the combined company was to create a comprehensive platform for virtual medical care. So, this unit combines data-driven experience and clinical expertise with innovative technologies.

Biggest mergers and acquisitions 2021

M&A activity in 2021 surpassed pre-COVID levels, reaching nearly 2015 peaks. Thus, easy access to capital and the recovery of the global economy set the stage for transactions totaling $5.1 trillion, the highest since 2015.

1. Canadian Pacific Railway – Kansas City Southern

While this merger deal was made public in 2021 when Canadian Pacific Railway announced its acquisition of Kansas City Southern, it has yet to be finalized. 

Shareholders of both parties have approved the $31 billion merger, and now it’s expected to be approved by the Surface Transportation Board. As stated by CPR and Kansas City Southern, the merged company will create the first direct railway network between Canada and Mexico.

According to regulations, the STB must decide on this merger by February 2023.

2. Shaw – Rogers

The $20 billion merger between Rogers Communications and Shaw Communications is still pending. 

More specifically, the deal reduces the number of operators in Canada from four to three, raising the Canadian Competition Bureau’s concerns about damage to competition.

To settle the issue, Rogers announced plans to sell its Freedom Mobile to Quebecor, which would alleviate concerns about operator competition in the country. Although this did not resolve the issue, all parties look forward to the project’s successful completion.

3. Deutsche Wohnen – Vonovia

Vonovia, Europe’s leading residential real estate group, acquired German rival Deutsche Wohnen for $22 billion.

According to the chief executive of Vonovia, Deutsche Wohnen greatly supports projects for improving the energy efficiency of apartments and adapting them for the elderly.

Biggest mergers and acquisitions 2022

The year started slower for M&As compared to 2021. Due to geopolitical instability, supply chain problems, and soaring inflation, uncertainty in the M&A environment increased. However, activity has remained relatively high. What’s more, North and South America are the most active dealers.

1. Microsoft – Activision Blizzard

Early in 2022, the news of Microsoft’s intentions to acquire Activision Blizzard in a $68.7 billion cash deal went public.

The deal is said to accelerate the growth of Microsoft’s gaming business across PCs, consoles, mobile devices, and the cloud. Moreover, if the merger is successful, Microsoft will become the third largest corporation in the world after Tencent and Sony in terms of revenue.

2. Broadcom – VMWare

In November, shareholders of VMware, the target company, voted in favor of being acquired by Broadcom.

The transaction is expected to close in Broadcom’s fiscal 2023. This deal will provide customers with more choices and flexibility to create, deploy, modernize, and protect applications.

Meanwhile, VMware stays on track as a standalone company and helps customers make sense of a multi-cloud world.

3. Oracle – Cerner

The software maker Oracle acquired the healthcare IT company Cerner in a $28 billion deal. The 69.2% stake owned by Cerner was tendered to Oracle.

As Oracle management said, Cerner is their anchor asset for their healthcare expansion. In addition, this acquisition can help the acquirer expand its cloud business into the health system market.

Also, Oracle’s CTO hopes this alliance will become a powerful supplier of next-generation healthcare information systems to healthcare professionals.

The four biggest mergers and acquisitions in history

While some of the biggest mergers and acquisitions of all time above have had varying success, the ones that we are going to list next have become the real game-changers in the business world. 

1. Vodafone – Mannesmann

The most sizable merger ever was also one of the most hostile – Mannesmann, a German telecom operator, fended off Vodafone’s advances for three months before finally succumbing to a $198 billion takeover in February 2000. The combined company had a worth of $342 billion, and the deal was only given the green light by European Union regulators when Vodafone pledged to sell off their sub-brand Orange to France Telecom.

The initial signs were promising for Vodafone – March 2000 saw its share price hit an all-time high – but the initial price bounce didn’t last long. Even so, Vodafone has effectively consolidated their share of the European market.

2. AOL – Time Warner

Ask any finance professional for an example of a terrible deal, and they’re likely to cite AOL’s $180 billion purchase of Time Warner as one of the most misguided M&A ventures ever – find out why in our post.

3. Verizon Communications – Verizon Wireless

When Verizon Communications bought Vodafone’s 45% stake in Verizon Wireless in 2013 – for a weighty $130 billion – it was the culmination of a ten-year chase to gain full control of the cell-phone carrier.

What’s more, it was fairly profitable for both sides. Verizon acquired an asset with no integration costs, and Vodafone gained a sizable $40 billion of capital to service its debt and reinvest into its operations in an increasingly competitive European market.

4. Dow – DuPont

In the last months of 2015, two US chemical giants agreed to embark on an unprecedented project in financial engineering. First, Dow Chemical and DuPont would merge, forming a company worth $130 billion – and then that corporate giant would subsequently split into three, with separate entities for agriculture, materials and specialty projects.

If you’re confused, you’re not alone – the companies actually created a whole website devoted to explaining all this maneuvering to their shareholders. The Dow and DuPont merger hasn’t gone through yet, and German rival BASF is even worst ever mergers & acquisitions – so watch this space.

As this last merger shows, there seems to be a trend for bigger and more complicated deals. Accurate information and insight, through virtual data rooms and industry experts, will only become more important.

Previous Post
The story of the first ever hedge fund
November 7, 2022 9 min read