Major Mergers & Acquisitions of 2022

Major Mergers & Acquisitions of 2022

From tech companies to healthcare, these deals will surely have ripple effects for years to come.

In the business world, mergers and acquisitions (M&A) are a common occurrence. Businesses are always looking for ways to grow and expand their operations, and one way to do that is by merging with or acquiring another company. 

According to The 2022 M&A Report by the global management consultancy Boston Consulting Group (BCG), the technology, energy and healthcare sectors were the most active in 2022 (till October) and 2021. Technology, specifically software and internet services, has seen the highest level of activity, followed by energy (mainly oil and gas) and health care (mainly pharma and biotech). Other sectors that have also seen significant M&A activity include financial services, real estate and infrastructure. Here, we take a look at some of the major M&A deals that took place in 2022:

Zomato acquiring Blinkit

In August 2022, food delivery giant Zomato completed the US$569 million acquisition of Blinkit (formerly Grofers), a leading quick commerce startup in India. Evolving from ecommerce, quick commerce aims to deliver products almost immediately. In addition, Zomato will also acquire Blinkit’s Hands on Trade Private Limited (HOTPL) warehousing and ancillary services business for US$8 million in cash. The company, however, does not buy Blinkit’s B2B trading business because it does not fit into their strategic goals for the future. The acquisition will enable the online food aggregator to enter the quick commerce space—a segment they’ve been interested in for some time. 

The deal has been criticized by some investors who feel Zomato is adding another loss-making entity to its portfolio. Also, skepticism arises with the lack of proof-of-concept for quick commerce in any big market globally. For the next few years, analysts believe that the quick commerce market will experience intense competition from players like Reliance Retail (via Dunzo), Tata’s BigBasket, Swiggy’s Instamart and Flipkart’s Quick.

Adobe’s Figma acquisition

Software giant Adobe announced in September 2022 that it would acquire web-based collaborative design platform Figma for approximately US$20 billion in cash and stock. With Figma’s web-based, multiplayer capabilities, the deal will allow Adobe to “accelerate the delivery of Adobe’s Creative Cloud technologies on the web”. With this acquisition, Adobe is further positioning itself as a leader in the design space. 

Adobe has a long history of acquiring some of the biggest and most popular tools in the creative space. In addition to Figma, Adobe has recently acquired notable companies like video production collaboration tool Frame.io and creative work-focused social media site Behance.

The Figma acquisition still needs to be approved by antitrust regulators, which could take some time. If all goes well, Adobe expects the deal to close sometime in 2023.

Microsoft buying Nuance

In March 2022, American tech giant Microsoft acquired Nuance Communications Inc., a leading provider of conversational artificial intelligence (AI) innovations and cloud-based ambient clinical intelligence to healthcare providers. With this US$19.7 billion acquisition, Microsoft plans to develop new solutions that combine voice, AI and cloud technologies for industries including healthcare, retail, telecommunications and financial services. 

Nuance has a long history of developing voice recognition products in various industries. Over the past three years, the company has been focusing on healthcare and enterprise AI, where the demand for advanced conversational AI and ambient solutions (that provide intelligent tools to help with medical documentation) is high. 

The deal will help Microsoft assert itself in hospitals and the healthcare industry in the U.S., where more than 55 percent of physicians, 75 percent of radiologists and 77 percent of U.S. hospitals are using Nuance’s products. The acquisition is Microsoft’s second largest bet after their US$26 billion purchase of LinkedIn in 2016.

Oracle’s Cerner deal

In June 2022, Software maker Oracle closed the US$28.3 billion acquisition of Cerner Corporation, a leading provider of healthcare information technology solutions. The move is strategic for Oracle, which aims to increase its footprint in the burgeoning healthcare market. 

Cerner was founded in 1979 and has since become a major player in the healthcare IT space, with clients that include hospitals, clinics and other care providers. The company’s software helps health organizations manage patient records, billing and health analytics. 

The two companies will work together closely to transform healthcare delivery while providing medical professionals with top-tier information. This enables them to make more informed decisions that may lead to better patient outcomes. It’s one of the biggest software M&As we’ve seen recently—slightly smaller than IBM’s US$34 billion acquisition of Red Hat in 2018 and bigger than Microsoft’s US$20 billion Nuance buy this past year.

Upcoming Trends

Recent research by data and technology firm Ernst & Young (EY) found that 72 percent of tech CEOs have plans to go for mergers and acquisitions in the next 12 months, compared with 59 percent of CEOs across all industries. 

Commenting on the M&A climate, Olivier Wolf, EY Global TMT Strategy and Transactions Leader, says “The deal market has slowed due to macro headwinds and financial volatility, but this has improved opportunities for corporate buyers with strong balance sheets.”  He expects that ‌competition for targets will be heated next year, with tech companies looking to explore new markets or adjacent verticals (e.g. health tech) and investors working to strengthen their portfolios with cutting-edge tech (e.g. AI).

In the years to come, it seems that we can expect the trend to last, with more M&A activity taking place in the tech sector as companies look to gain a competitive edge.

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