It wasn’t until the 1980s that companies were being purchased for over 1 billion dollars, and the first transaction value over $100 billion was in 1999. We list some of the most lucrative technology mergers and acquisitions in history.
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Technology Mergers and Acquisitions Over $100 Billion
In the tech industry, takeovers are a common occurrence and are usually regarded as part of a company’s growth strategy and to increase profitability. Whether the purchasing company is set to develop a new product line or target geographical outreach, mergers, and acquisitions can occur at domestic or global levels.
Apple is valued at $352 billion, making it the largest technology company in the world. They are known to have acquired more than 100 companies, though this number is unconfirmed because they don’t reveal details unless discovered by the media.
The technology industry has a high number of mergers and acquisitions because of the fierce competition – smaller firms often join forces with larger companies to be able to compete better and survive poor economic conditions.
Mannesmann by Vodaphone -- $183 billion
The British telecommunications company Vodaphone (VOD) is responsible for the largest ever merger and acquisition (as of March 2020) and the first to top $100 billion. The 1999 takeover of German industrial conglomerate Mannesmann accepted an offer for $183 billion, worth $281 billion if adjusted for inflation today.
The record deal was expected to reshape the global telecommunications world and made Vodafone the largest mobile operator. Unfortunately, the merger failed spectacularly, and Vodafone had to write off billions of dollars in the following years that destroyed vast amounts of shareholder wealth.
Time Warner by American Online -- $182 billion
At the height of the dotcom bubble, in 2000, the web portal and online service provider AOL bid to acquire the mass media and entertainment conglomerate Time Warner. The $182 billion deal meant Time Warner shareholders owned 45 percent, and AOL shareholders owned 55 percent of the new company.
As a result, the $350 billion mega-corporation held a dominant cable and internet industry position until the dotcom bubble burst. The company’s clashing management styles forced them to go separate ways spinning off as independent companies.
Vodafone Group by Verizon Communications -- $130 billion
Verizon Communications, stylized as Verizon, the American multinational telecommunications conglomerate, paid $130 billion to buy Vodafone Group out of its U.S. wireless business. The deal brought an end to the often tense 14-year relationship. Verizon took full control of Verizon Wireless, a company that began in 1999 due to Vodafone’s Airtouch and Bell Atlantic’s mobile division merger.
Investors pocketed around $87 billion collectively in shares, cash, and U.S. stock.
Seemingly interlinked with the top three most significant technology mergers and acquisitions, Verizon later acquired AOL in 2015 and Yahoo in 2017, amalgamating into Oath Inc, also known as Verizon Media.
Raytheon by United Technologies -- $120 billion
The Massachusetts multinational conglomerate Raytheon Technologies Corporation merged with United Technologies Corporation, or UTC, recently in 2020. The new entity continued with the name Raytheon Technologies in an all-stock deal that took almost a year to finalize.
Top Technology Mergers and Acquisition Deals That Failed to Complete
Sprint by MCI WorldCom — $129 billion
In 1999 this telecommunications giant was stopped on competition grounds with the Department of Justice filing a lawsuit against the merger. A few years later, in 2002, an accounting scandal helped force the company to file for bankruptcy. Verizon Communications later acquired it.
Qualcomm Inc by Broadcom Ltd — $121 billion
In this 2018 deal, Qualcomm felt that their business was undervalued, and the initial offer of $140 billion (with debts) was rejected. After meeting with Broadcom officials, the offer was reduced to $117 billion because of another bid for NXP Semiconductors. Eventually, the deal was blocked by The Trump administration due to national security issues.
It’s clear that while technology mergers and acquisitions are common, they aren’t always successful longterm. Often occurring during an economic bull run, many factors may or may not be under the parties’ control.
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Do you think the majority of technology mergers and acquisitions are overvalued? Let us know in the comments section below.