Knowledge — 8 months ago

The Most Outrageous Company Acquisitions From The Last 5 Years

by Keren P.

Company Acquisition, Company Mergers, Acquisitions

The Most Outrageous Company Acquisitions From The Last 5 Years

Mere rumors of a merger or acquisition have the potential to send shockwaves through the business world. A rumored reorganization can affect the decisions of multiple stakeholders such as employees, competitors, and the general public. In this article, we learn about the five most outrageous company acquisitions in the last five years.

Verizon Communications acquires Verizon Wireless (2013)

The acquisition of Verizon Wireless by Verizon Communications at a value of 130 billion dollars pegs it at the largest of the 2010s and the third largest corporate deal ever signed. Previously, the 45% stake in Verizon Wireless was owned by Vodafone and was purchased by Verizon Communications, giving them sole ownership.

The deal signified the easing of tensions between Verizon and Vodafone which had long been strained. For years, speculation abounded as to whether Vodafone would leave or be forced out of Verizon. The deal went on to give Verizon Communications further clout in the market and in a stronger position against competitors.

Company Acquisition

Dow Chemical acquires DuPont (2015)

The all-stock merger of the two giants of the American chemical industry, Dow Chemical with Dupont was at a value of 130 billion dollars. The new company was to be called DowDuPont and prior shareholders of the two merging companies would have equal stakes.

The group intended to subsequently divide DowDuPont into three independent entities that would each pursue more focused lines of business: seeds and crop protection, materials (like plastics), and specialty products and chemicals. The merger plan was expected to bring short-range value improvements and greater benefits from the hiving off exercise.

 

Anheuser-Busch InBev acquires SABMiller (2015)

Meanwhile, in the beer industry, Anheuser-Busch InBev, the company that owns brands like Corona, Budweiser and Stella Artois, acquired SABMiller, the owner of Miller Lite, Peroni, and Fosters, at 130 billion dollars. The merger would increase global player Anheuser-Busch InBev’s exposure in the world market, particularly in markets that were emerging at the time, such as in Africa, Asia, Central and South America. The combined group would be able to operate in virtually every market, consolidating in view of the new interest in smaller players in the industry, namely craft breweries. The combined entity would be able to offer more options to consumers.

Company Mergers

Heinz acquires Kraft (2015)

At a value of 100 billion dollars, H.J. Heinz Co. announced the merger with the Kraft Foods Group to form a new company namely The Kraft Heinz Company. Heinz has a global presence deriving 60% of its sales from regions outside North America and 25% from emerging economies. Kraft’s revenues are 98% from North America. Hence, there is scope to market and sell Kraft products in other regions.

The combined entity also hoped to refinance debt incurred by Heinz using Kraft’s better credit rating. Other operational changes like reducing superfluity in employee headcount, shutting down inefficient factories, and implementation of zero-based budgeting also promise to bring cost savings.

AT&T Inc. acquires Time Warner (now WarnerMedia) (2018)

The most recent acquisition in our list by AT&T, the technology giant, with Time Warner, the media behemoth. Recognizing the future of media and the shift to mobile devices underpins this merger which occurred at approximately 100 billion dollars.

The merger portends a combination of AT&T’s expertise in customer engagement and the creativity at Time Warner to bring a unique and entertaining customer experience. Beside significant customer benefits and portfolio diversification, the acquisition was financially beneficial as well. It would also put the combined entity at a greater competitive advantage in the market.


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