The term Mergers and Acquisitions (M&A) refers to the buying, selling, dividing and combining of different companies and similar entities by corporations, with the goal of growing more rapidly and efficiently.
It is a trend spurred by increased global integration of the economy, which requires successful corporations to operate at a multinational level.
|1||130100||Verizon Wireless Inc.||United States||Telecom||Wireless||Verizon Communications Inc.|
|2||27361.7||HJ Heinz Co.||United States||Consumer Staples||Food and Beverage||Investor Group|
|3||25531||Virgin Media Inc||United States||Telecom||TelecomServices||Liberty Global Inc.|
|4||19331.1||Omnicom Group Inc.||United States||Media and
|Advertising & Marketing||Publicis Groupe SA|
|5||19283.8||Dell Inc||United States||High Technology||Computers & Peripherals||Investor Group|
|6||16700||NBCUniversal Media LLC||United States||Media and
|7||15717.5||Portugal Telecom SGPS SA||Portugal||Telecom||TelecomServices||Oi SA|
|8||15367.6||Life Technologies Corp||United States||Healthcare||Biotechnology||Thermo Fisher Scientific Inc|
|9||14009||Westfield Group-Australian/NZ||Australia||Real Estate||Non Residential||Westfield Retail Trust|
|10||13248.5||Zoetis Inc||United States||Healthcare||Pharmaceuticals||Zoetis Inc|
|11||13025.4||Shoppers Drug Mart Corp||Canada||Retail||Other Retailing||Loblaw Cos Ltd|
|12||11708.3||CDC-SME Financing Business||France||Financials||Other Financials||France-SME Financing Business|
|13||11647.5||Bausch & Lomb Inc||United States||Healthcare||Healthcase Equipment
|14||11435.1||E-Plus Mobifunk GmbH & Co KG||Germany||Telecom||Wireless||Telefonica Deutschland Holding|
|15||10401.9||Cole Real Estate Investments||United States||Real Estate||REITs||American Rity Capital Ppty Inc|
How do these deals relate to Economic Freedom?
According to Thomson Reuters of the top largest fifteen announced M&A deals in 2013, almost half (seven) involved telecommunications, media and technology companies (TMT), three were in the health sector, two in real estate and there was one apiece for the finance and food & beverage sectors.
There were 14 TMT mega-deals (above $5 billion), the highest number since the 21 mega-transactions in 2007. Transactions valued at $10 billion and above helped to drive US M&A volume in 2013. There were 12 such deals, worth an aggregate $367.4 billion, the highest volume of mega deals since 2008’s total of $401.8 billion, accounting for 31% of total US M&A. Deals valued between $1 billion and $10 billion, meanwhile accounted for the majority of US targeted M&A, at 37% of all deals.
Europe saw a 24% increase in deals valued over $5bn. In Asia Pacific there were 81 deals valued over $1 billion in 2013.
The biggest deal of the year — and one of the biggest of all time — was Verizon’s agreement to buy out Vodafone’s 45% stake in Verizon Wireless for $130 billion. More than a decade in the making, this is the third largest corporate transaction of all time, behind AOL’s merger with Time Warner and Vodafone AirTouch’s takeover of Germany’s Mannesmann.
The second largest deal of the year and the largest ever deal in the food sector is Berkshire Hathaway and 3G Capital’s $27.4 billion acquisition of Heinz.
Third was Liberty Global’s $24 billion deal to buy UK cable-TV and broadband provider Virgin Media, creating a much stronger rival to British Sky Broadcasting. The deal is seen as a stepping stone, as Liberty Global seeks to build a European pay-TV empire.
In fourth place and one of the biggest shocks of the year was the announced advertising agency mega merger between bitter rivals Publicis and Omnicom, although the deal was called off in May 2014.
At Five, is Michael Dell, and the private equity firm Silverlake’s buyout of Dell Computers for $25 billion is seen as a bit of a steal of the company began by Michael Dell at university.
Comcast’s buyout for General Electric’s remaining stake of NBCUniversal Media for $16.7 billion is at number six, and comes two years after the Philadelphia cable TV operator acquired a 51% interest in the media company.
At seven, is Brazil’s biggest phone company Oi Sa’s merger with Portugal Telecom for $17 billion, followed by Thermo Fisher Scientific’s acquisition of Life Technologies for $13 billion.
|VALUE AND # OF CROSS-BORDER M&A BY REGION/COUNTRY|
|VALUE AND # OF CROSS-BORDER M&A BY SECTOR/INDUSTRY|
- Briefing, M&A Definitions and Motivations, Professor Ian Giddy, New York University
- M&A Definition – Wikipedia
- QFinance – M&A Definition and Global Regulations
- Thompson Reuters/Mergers and Acquisition Review – 2Q2012
- Thompson Reuters/Mergers and Acquisition Review – Year end 2011
- Thomson Reuters / Financial League Tables