The technology sector is so unpredictable that with new companies emerging with the introduction of better technologies, it gets reshaped every now and then. There have been some significant moves in the tech market which have placed enterprises which currently rule it in their giant positions of today. The Merger and Acquisition (M&A) deals have a huge role here, some of them having changed the scenario of these industries and given them their present valuations.
The reasons for these acquisitions are varied – to gain best talent, to gain access to patented ownerships, bring down a potential competitor etc. Often these turn out to be fruitful and many times result in losses. Be it the US$ 2.6 million acquisition of Skype by eBay in 2005, or Google’s deal to acquire Motorola for US$ 12.5 million in 2012 which resulted in failure. Or the Disney co-acquiring Pixar for US$ 7.4 billion in 2006 or the Google acquiring Android for US$ 50 million that resulted in success. Here are some of the Merger and Acquisition (M&A) deals of the technology industry that made their mark over the market.
Dell Buys EMC
The American tech enterprise, DELL EMC previously known as EMC Corporation was bought by DELL in a US$ 67 billion deal in 2015. The company was created after the announcement made by DELL in 2015 about launching a bid to acquire American tech EMC. This was a record amount for the technology industry and the most expensive tech acquisition ever done. This deal merged the DELL’s PC, Mobile and Server business to the storage business of EMC.
Merger Closing Date: September 7, 2016
Capital Involved: US$ 67 Billion
IBM’s Deal for Red Hat
IBM, the America based global computer enterprise announced their intent to acquire the leader for open source data Red Hat for UD4 32 billion on October 28, 2018. IBM wanted to acquire Red Hat for the development of its largest portfolio for open source technology, a hybrid platform based on cloud and a huge community of open source developers. This acquisition made these companies the leader of hybrid-multi providers of cloud.
Acquisition Closing Date: July 9, 2018
Capital Involved: US$34 Billion
Avago Technologies’ agreement to buy Broadcom
The chip maker company Avago Technologies announced acquiring Broadcom Corporation on May 28, 2015 for US$ 37 billion. This deal renamed the combined company as Broadcom Limited. Broadcom was one of the rivals of Avago Technologies at that time. The deal was signed by paying US$ 17 billion cash and US$ 20 billion shared by Avago Technologies. This was the biggest M&A chip deal ever made in the tech industry.
Acquisition Date: May 28, 2015
Capital Involved: US$37 billion
Microsoft Buys LinkedIn
Microsoft Corporation announced entering a definitive agreement with the online business and employment oriented service LinkedIn on June 13, 2016. This deal was aimed at growing the professional networking website and integrating it with the software offered by Microsoft like Office 365. This was one of the successful deals that helped Microsoft to reach the user base of LinkedIn.
Acquisition Date: June 13, 2016
Capital Involved: US$26.2 Billion
Hewlett-Packard buys Compaq
The merger deal of HP and Compaq was announced on September 3, 2001 at US$ 25 billion. HP intended this merger to become the world’s No.1 Information Technology Company worldwide. The announcement was quite a shocking one, as the criticizers predicted it to be a disastrous and painful merger. However, this M&A built a business that achieved more than and quicker than what a company would have done alone.
Merger Date: September 3, 2001
Capital Involved: US$25 billion
Facebook buys WhatsApp
With the aim to dominate messaging over web and phones, Facebook acquired WhatsApp for around US$ 21.8 billion. When Facebook announced its intent to buy the platform, the founders of WhatsApp put a price of US$ 16 billion which included US$ billion cash and US$ 12 billion shares of Facebook. But Facebook paid US$ 21.8 billion for the deal.
Acquisition Date: February, 2015
Capital Involved: US$22 billion
Microsoft buys Skype
Microsoft announced buying Skype in a US$ 8.5 million deal in May 2011. This was the first sizable acquisition done by the global IT leader since August 2008 when it spent US 486 million on the company Greenfield Online. The most obvious reason for this deal was the collaboration of Lync links or the communications server computers to a Private Branch Exchange. The M&A deal was done with cash from an investor group led by global tech investment firm Silver Lake.
Acquisition Date: May 2011
Capital Involved: US$ 8.5 Billion
Oracle Buys Sun Microsystems
The American IT technology enterprise, Oracle announced signing a definitive agreement under which they will acquire Sun Microsystems for US$ 7.4 billion on April 20, 2009. This acquisition transformed the IT industry to combine the best-in-class company software with the most critical computer systems. This deal made Oracle the only company with the ability to engineer a completely integrated system.
Acquisition Completion Date: January 27, 2010
Capital Involved: US$7.4 Billion
Microsoft Buys Nokia
Microsoft completed the acquisition of the Smartphone business of Nokia in a US$ 7.2 billion deal in 2014. With this Microsoft took in 32,000 employees of Nokia including the Nokia CEO, Stephen Elop. However, a series of layoffs triggered the end of this mobile subsidiary of Microsoft. Microsoft later sold it to a HMD Global and Hon Hai technology Group subsidiary at US$350M in 2016.
Acquisition Closing Date: April 25, 2014
Capital Involved: US$7.2 Billion
Lenovo buys Motorola from Google
Google made an unexpected announcement of selling the headset maker Motorola to Lenovo in January 2014 which it bought for US$ 12.5 billion in 2012. The deal was closed at USS$ 2.91 billion and included a mix of cash and company stocks. With this the ownership of 2000 Motorola patents were transferred to Lenovo. However, the major patents remained with Google only.
Acquisition Date: January 29, 2014
Capital Involved: US$2.9 billion
Google buys Android
Google acquired Android Inc in July 2005 for around US$ 50 million. This was one of the remarkable deals of the tech industry as it helped Google to capture most of the market share of Smartphones. It was a great success, as it gave them a great start in the mobile space.
Acquisition Date: August 17, 2005
Capital Involved: US$ 50 Million
These were some the Merger and Acquisition (M&A) deals that impacted the tech industry and helped some of the market giants in scaling their markets. The M&G deals are a good strategy for any company to gain a better place in the market in terms of technology, market or power. However, if not done with right planning it can definitely turn out to be huge failures.
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