From Salesforce-Slack to Microsoft-LinkedIn, here’s a look at some of the biggest M&A deals that went down in the past five years.
As companies eye growth or plan to diversify into a new sector or products, several massive mergers and acquisitions (M&A) have closed in recent years.
According to a report by Statista, the value of global M&A deals has increased in the past few decades. While in 2020 the value of global M&A deals amounted to US$2.8 trillion, it was $3.37 trillion in 2019 and $3.39 trillion in 2018. Meanwhile, in 2019, the global value of M&A in the tech industry stood at $460 billion.
Here’s a look at some of the biggest M&A deals that the tech industry witnessed in the past five years:
1. Microsoft acquires LinkedIn for $26B (2016)
Microsoft made its largest acquisition by buying LinkedIn for $196 per share in an all-cash transaction valued at $26.2 billion. The deal was closed in December 2016, six months after it was first announced.
Around the time of the deal, Microsoft had begun plans to integrate LinkedIn with Office 365 and launched a dedicated LinkedIn Windows 10 app in 2017.
“Things have certainly exceeded our expectations. We had a pretty aggressive plan in place and we’ve been able to outperform that plan,” then-LinkedIn CEO Jeff Weiner told Bloomberg three years after the deal.
2. Salesforce acquires Slack for $27.7B (2020)
In the biggest acquisition in its 21-year history, Salesforce, the global leader in customer relationship management (CRM), announced in late November 2020 that it was buying workplace chat software startup Slack for around $27.7 billion.
As per the agreement, Salesforce is purchasing Slack through a combination of cash and stock, with shareholders receiving $26.79 in cash and .0776 shares of Salesforce common stock per share. The deal brings together two SaaS giants and is one of the largest acquisitions in the software industry.
“This is a match made in heaven,” said Marc Benioff, Co-Founder and CEO of Salesforce. “Together, Salesforce and Slack will shape the future of enterprise software and transform the way everyone works in the all-digital, work-from-anywhere world.”
3. SoftBank acquires ARM for $32B (2016)
In one of the biggest tech deals of 2016, SoftBank acquired British chip design giant ARM Holdings (name later changed to Arm in 2017) for £24 billion in cash (around US$32 billion at the time). The deal was closed in September 2016.
The deal came as part of SoftBank’s efforts to jump into Internet of Things technology.
“ARM will be an excellent strategic fit within the SoftBank group as we invest to capture the very significant opportunities provided by the ‘Internet of Things,’” said Masayoshi Son, CEO of SoftBank.
4. IBM acquires Red Hat for $33B (2019)
In IBM’s largest ever deal, the company closed its acquisition of open-source software maker Red Hat for $34 billion in July 2019. IBM acquired all shares of Red Hat for $190 per share in cash.
The acquisition came as part of IBM’s bid to ramp up its cloud computing business. The companies had stated that together, they will deliver a “next-generation hybrid multicloud platform” which will be based on “open source technologies, such as Linux and Kubernetes.”
Ginni Rometty, IBM’s CEO at the time, stated that the deal was driven by customer demands as well as to help companies “move mission-critical work” to the cloud.
5. AMD acquires Xilinx for $35B (announced 2020)
Last October, semiconductor designer Advanced Micro Devices Inc (AMD) announced that it will be acquiring Xilinx in an all-stock transaction valued at $35 billion.
While AMD specializes in making chips for personal computers, Xilinx has developed highly-flexible programmable silicon to drive innovation across a range of industries. The deal, which is anticipated to close at the end of 2021, is expected to give AMD a stronger foothold in the battle with Intel in the data center chip market.
“Our acquisition of Xilinx marks the next leg in our journey to establish AMD as the industry’s high performance computing leader and partner of choice for the largest and most important technology companies in the world,” said Dr Lisa Su, President and CEO of AMD.
While Su will lead the combined company as Chief Executive, Xilinx’s CEO Victor Peng will serve as president responsible for the Xilinx business and strategic growth initiatives.
6. Nvidia acquires Arm for $40B (announced 2020)
Nvidia announced its plans to acquire Arm Holdings for around $40 billion from existing owner SoftBank in September last year.
As per the deal – the largest in the semiconductor industry – SoftBank will receive $2 billion in cash for signing the deal, and $10 billion in cash and $21.5 billion of stock at closing. The deal will help NVIDIA drive innovation in next-generation artificial intelligence and expand into larger markets.
U.S.-based Nvidia, which designs and manufactures computer graphics processors, chipsets, and related multimedia software, is planning to build an AI research centre at Arm’s Cambridge campus. Additionally, it will invest in an Arm-powered AI supercomputer and training facilities for healthcare, life sciences, robotics, and self-driving cars.
“This combination has tremendous benefits for both companies, our customers, and the industry,” said Jensen Huang, founder and CEO of NVIDIA. “For Arm’s ecosystem, the combination will turbocharge Arm’s R&D capacity and expand its IP portfolio with NVIDIA’s world-leading GPU and AI technology.”
7. Dell acquires and merges with EMC Corporation in $74B deal (2016)
Dell acquired and merged with EMC Corporation in a $67 billion deal, creating the world’s largest privately-controlled tech company – Dell EMC. The deal closed in September 2016 and Dell paid EMC shareholders $24.05 per share in cash.
Headquartered in the U.S., Dell EMC offers a range of products and services including data storage, information security, virtualization, analytics, and, cloud computing.
“We are at the dawn of the next industrial revolution,” said Michael Dell, chairman and CEO of Dell Technologies. “Our world is becoming more intelligent and more connected by the minute, and ultimately will become intertwined with a vast Internet of Things, paving the way for our customers to do incredible things.”
Salesforce’s acquisition of Tableau for $15.7 billion in 2019, Amazon’s $13.7 billion acquisition of Whole Foods in 2017, and Walmart’s acquisition of Bengaluru-based Flipkart in a $16 billion agreement in 2018, are some of the other notable M&A in the last five years.
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