The world of business and entrepreneurship is a network of many opportunities. The name of the game when starting out as a businessman/businesswoman or an entrepreneur is to discover and take advantage of every opportunity possible to earn profit at a booming pace, enough to keep an organization or a company afloat.
One of the more common strategies big businesses do is to enter into a mergers and acquisitions deal (M&A) with another company. In a nutshell, a mergers and acquisitions deal is a business transaction where two companies are either combined into a single entity or one of the businesses involved in the deal agrees to absorb the other company including all of its operations and other relevant departments.
Some of the reasons why businesses write up M&A deals include expansion, cutting down on expenses, entering another market, and reducing the competition. However, at the end of the day, companies that are involved in mergers and acquisitions deals want to get their money’s worth.
Frankly, while some deals turn out to be a failure, there are some which have been wild successes. Here are some of the largest mergers and acquisitions in history.
20. Google and Motorola
For a massive $12.5 billion, the tech giant Google purchased the electronics-affiliated company Motorola Mobility in order to get a hold of its patents. With plans to expand its range and enter the mobile phone market, Google had intended to enter the competition with enough firepower to keep it stable against rival companies.
However, the deal — which was predicted to make Google-manufactured Motorola devices possible — was not as successful as people thought it would be. Google eventually sold Motorola off for only $2.9 billion while maintaining ownership of the patents.
19. Microsoft and Skype
Another acquisition deal that made the headlines was the transaction between the legendary company Microsoft and the popular telecommunications organization Skype. For a hefty $8.5 billion price tag, with Skype’s technology, Microsoft had aimed to improve the effectiveness of its communications operations especially when connecting with its customers through its many services which have call options available. The move allowed Microsoft to enter a more flexible market at the same time.
18. Facebook and WhatsApp
Closing in on $22 billion, the social media giant Facebook acquired the instant messaging app WhatsApp in order to expand its reach to more untapped markets and in turn, spread out the opportunities available for Facebook and its operations.
With WhatsApp having a lot of users in areas where Internet connection is not as developed as it is in other countries, Facebook saw the opportunity to acquire the market covered by WhatsApp and in turn, promote its own services through the acquisition deal. The ownership of WhatsApp also allowed Facebook to improve its own messaging platform Messenger.
17. Google and Android
Yet another big-time deal was made in the booming tech industry in a partnership made between Google and Android, which was relatively unknown at the time and was still in its early stages as a budding start-up.
Without making a fuss about things, Google was quick to offer Android a $50 million deal which was certainly a huge price tag, especially for such a lowkey company that has yet to show its real value. While other analysts have doubted the move by Google, the business deal would turn out to be one of the most successful business transactions that Google would ever make in its history.
16. Pfizer and Warner-Lambert
With the impact of the coronavirus pandemic, the pharmaceutical company Pfizer has been a hot topic all over the world. However, during the late 90s, the company was already making the headlines for its acquisition of fellow pharmaceuticals company and rival Warner-Lambert.
For a $90.2 billion price tag, Pfizer absorbed the operations of Warner-Lambert and its products, including the highly sought-after cholesterol-moderating drug Lipitor. Prior to being acquired, Warner-Lambert had split the profits of Lipitor with Pfizer who had commercial rights.
Seeking to expand their earnings, Warner-Lambert had attempted to sue Pfizer to maintain full ownership of Lipitor, however, the deal would bite the company back when Pfizer initiated a takeover of the company.
15. Pixar and Disney
The global media company giant, The Walt Disney Company, has been a dominating force in the industry during the current times. However, the business has been going strong for several generations now, and with the influence it has been able to establish, entering lucrative acquisition deals is certainly a breeze for it.
One of the biggest transactions that the company was able to land is purchasing Pixar Animation Studios for a staggering $7.4 billion, subsequently leading to the creation of many hits such as Toy Story 3 and Coco.
14. AT&T and Time Warner
The massive telecommunications corporation AT&T and the cable provider Time Warner entered a merger deal that was worth a whopping $85.4 billion when it was finalized in 2018 amidst conflicts with the Department of Justice. With the two companies being familiar with the setup of merger and acquisition deals, the partnership between the two organizations was expected to carry less of a risk than other deals.
With the media content industry shifting rapidly as time passes by, there still remains a bit of uncertainty as to where AT&T would direct the partnership, especially during the pandemic when customer preferences have greatly shifted.
13. Dell and EMC
To this day, the acquisition deal which saw the tech company giant Dell purchase the data storage company EMC for $67 billion, remains to be one of the biggest transactions landed in the technology industry.
Since the 2010s, analysts have begun noticing the increased activity of Dell as a whole, and with the acquisition of EMC, there is no doubt that the company has plans to continue to expand in the near future not only to reach more markets but to become competitively stable as well during a time where the technology industry is at a boom.
12. Microsoft and Nokia
Another blockbuster deal was landed in the technology world when Microsoft swooped up the failing electronics company Nokia for a huge price tag of $7.2 billion, expectedly, the move had people scratching their heads as to why a big company such as Microsoft is risking billions of dollars on a company that is on the verge of liquidating.
However, a shift in the company direction of Microsoft saw a more bright future in software rather than the hardware pursuit of the previous CEO, Steve Ballmer. Microsoft’s plans to enter the mobile phone market were effectively scrapped and many job cuts were initiated within Nokia.
11. HP and Compaq
The merger deal of the tech organization Compaq with the multinational company HP for a handsome $25 billion amount was already experiencing rough patches even during the beginning of the partnership. Both companies already experiencing internal difficulties, and the combination of the two organizations led to many culture clashes and other issues that eventually grew too large to be contained.
Subsequent scandals of cheating during the deal process and ineffective management eventually led to the partnership crumbling down disastrously. To this day, the merger remains to be one of the worst that the industry has ever encountered.
10. DuPont and Dow Chemical
The chemical company giants DuPont and Dow Chemical raised the eyebrows of many investors and the general public alike when they announced a big-time merger in 2015. The agreement said to be worth an astounding $130 billion, would effectively create the world’s largest chemical company called DowDuPont Inc. which would handle three sectors — materials science, specialty products, and agriculture. Not only was the competition minimized, but the earning potential of both companies is still a great strategy to this day.
9. SmithKline Beecham and Glaxo Wellcome
The United Kingdom is no stranger to its fair share of pharmaceutical companies, but people were taken by surprise when the two largest companies in the industry, SmithKline Beecham and Glaxo Wellcome agreed to a merger deal that created a combined value of around $180 billion when it was finalized.
However, analysts were not too fond of the partnership and to this day, the merged organization has yet to realize its full potential despite being ranked among the top pharmaceutical companies worldwide.
8. Celgene and Bristol-Meyers Squibb
The acquisition of the pharmaceutical company Celgene by its competitor Bristol-Meyers Squibb for a $95 billion price tag is yet another huge transaction completed in the industry which has already seen a lot of money go in and out for decades.
But what’s more important is the fact that the merged companies are currently the world’s top cancer drug manufacturers, the combination of the two would hopefully see developments in cancer treatment and other discoveries.
7. SABMiller and AB InBev
Anheuser-Busch InBev, which is one of the world’s largest brewing companies, scored a big deal when it was able to acquire rival brewer SABMiller for approximately $107 billion when negotiations were closed.
A move that experts have been eagerly anticipating, the formation of the partnership was said to be a strategy for taking advantage of emerging markets and the strong growth potential that can be explored by both companies if they worked together.
6. Heinz and Kraft
The merger agreement between the food company giants H.J. Heinz Co.and Kraft remains to be one of the most famous (or rather infamous) deals made in the business world. For a huge amount of $100 billion, a deal was struck between the two organizations that saw the creation of The Kraft Heinz Company which people had already predicted would enter the prestigious list of the top food companies globally.
However, the merger did not kick off as expected. Due to issues such as accounting errors, failure to keep up with the times, and the rapidly changing preferences of customers all over the world, the merged company has not realized the gains that it was confident it would experience to this day.
5. Suez and Gaz de France
The merger deal between the blockbuster French companies Suez and Gaz de France attracted so much attention from the public that the country itself intervened in the negotiation process in order to make the partnership possible.
The new company, Suez Environment, is the product of a $182 billion agreement between Suez, a utility company, and Gaz de France which specialized in natural gas processing.
4. AOL and Time Warner
The big-time merger deal between web provider AOL and the cable company Time Warner was another highly anticipated merger in recent times. Fetching an amount reaching around $182 billion, the partnership of the companies produced a merged organization called AOL Time Warner which was set to dominate the media industry.
However, circumstances such as a recession and the dot.com bubble bursting, combined with poor management and culture clashes eventually led to the downfall of the merger agreement, a disaster that continues to be remembered to this day.
3. Verizon and Vodafone
For $130 billion, the wireless network giant Verizon was able to acquire a 45% stake in the telecom company Vodafone which would eventually lead to the birth of Verizon Wireless — a move that would reduce not only reduce the competition faced by Verizon in the United States but also enhance its operations all the more for the years to come.
2. Raytheon and United Technologies
The merger between the aerospace company United Technologies and the defense organization Raytheon Technologies for an amount of $120 billion was called a “fair deal” between the equally matched organizations. Combining the research and development efforts of the organizations, the merged partnership is said to expand on the advancements in the aerospace and defense sectors.
1. Vodafone and Mannesmann
To this day, the title of the biggest acquisition deal still goes to the telecom giant Vodafone when it bought German telecom company Mannesmann AG for a grand sum of $203 billion when negotiations ended.
Successful, Vodafone was able to leverage its takeover of Mannesmann to its advantage with several profitable deals being made afterward — effectively putting Vodafone on the top of the entire industry.
What was the Most Famous Merger in History?
One of the most famous merger deals to date is the partnership between the food company giants H.J. Heinz Company and Kraft Foods Group Incorporated which created the merged organization named The Kraft Heinz Company which at the time was predicted to be a leading company in the food industry.
What was the Most Famous Acquisition in History?
To this day, the deal between the telecom giants Vodafone and Mannesmann remains to be one of the most famous acquisitions to date. For a staggering amount of $183 billion (around $297.7 billion when adjusted for inflation), the takeover deal started by Vodafone is still remembered as one of the biggest acquisition deals in history.