To respond to market complexity, many executives turn to mergers and acquisitions (M&A) as an effective transformation and value-generation strategy.
With this in mind, the M&A Community is producing a series of articles to support business owners and executives in taking the first steps towards beneficial deals and helping individuals around the globe capture benefits beyond the expected synergies.
The world has seen lots of successful mergers and acquisitions examples. However, sometimes even the biggest mergers can turn into failure. Let’s try to figure out the reasons by the example of recent mergers and acquisitions.
This article covers the largest acquisitions for the last five years: both successful and failed. Read on to explore.
Overview of the biggest M&A deals for the last 5 years (2017-2021)
Since 2010, about 500,000 merger and acquisition deals have been concluded globally.
Starting from 2016, the overall number of M&A deals fluctuated slightly, but, by the end of 2021, it drastically increased to 63,000.
In 2021, the overall value of worldwide mergers and acquisitions in business amounted to almost six trillion dollars.
Let’s go through the most memorable international acquisitions of recent years that made it and where post merger integration proved to be successful.
Five biggest M&A deals in 2017
- Linde AG and Praxair, $80 billion
Linde AG is a chemical company that specializes in producing and distributing atmospheric gases and was started in Germany. Praxair was one of the biggest American global industrial gas companies. The main reason for the merger of these two firms was the desire of the buy side vs. sell side to resolve the competition concerns in Canada. . The successful Linde AG and Praxair merger would lessen the competition in a supply chain. As a result of the proposed merger, a combined company appeared — Linde plc. This merger of equals is considered one of the largest M&A deals, costing about $80 billion.
- CVS Health and Aetna, $70-billion
The $70-billion merger of Aetna and CVS Health resulted in the new healthcare giant. The Aetna acquisition created new business prospects for the CVS Health corporation as well as for the merged company. Through a vertical merger, these two companies aimed to transform the customer healthcare experience, combining health insurance and pharmacy services in one. And though many M&A business experts find this transaction questionable since customers might not welcome the higher healthcare costs, it’s still one of the most successful mergers and acquisitions.
- British American Tobacco and R. J. Reynolds Tobacco Company, $49 billion
To increase the market presence and customer base, British American Tobacco acquired the remaining 57.8% of Reynolds American Inc. With the $49 billion deal closed, the holding company increased cash flows and built a stronger financial profile. Target company’s shareholders received for each Reynolds share $29.44 in cash. British American Tobacco and R.J. Reynolds Tobacco Company merger is considered one of the biggest deals in history not only because of its price but also because of such big brands combined as Camel, Lucky Strike, and Pall Mall.
- United Technologies and Rockwell Collins, $30 billion
United Technologies and Rockwell Collins merger is definitely one of those Wall Street Journal cases. After the United Technologies (UTC) company has received all the regulatory approvals to buy Rockwell Collins, it resulted in one of the biggest company acquisitions in the aerospace manufacturing industry. This successful merger allowed the new entity to broaden the customer market and increase cash flows by making the aerospace industry booming. The full value of the deal is about $30 billion.
- Shenhua Group and China Guodian Corporation, $278 billion
This deal is one of the biggest acquisitions in China. Shenhua Group was the largest coal provider in China, and China Guodian Corporation is one of the five largest electricity producers. After the government and investors approved this integration, it kicked off the formation of the combined entity, which was expected to become the largest power company by capacity in the world. The deal closed with $278 billion of combined assets.
5 biggest M&A deals in 2018
- Energy Transfer Equity and Energy Transfer Partners,$90 billion
Energy Transfer Equity and Energy Transfer Partners merger aimed to simplify the overall structure of the new company, as well as increase cash distribution coverage and improve the integrated company’s cost of capital. The combined value of one company that occurred after the merger was estimated to be $90 billion.
- The Walt Disney Company and 21st Century Fox, $71.3 billion
The $71.3-billion deal between Walt Disney Company and 21st Century Fox allowed the buying company (Walt Disney) and the target company (21st Century Fox) to unite their assets to gain a higher market value and presence. This transaction is considered one of the largest mergers in the global media industry for the last 50 years. By the time of the integration, The Walt Disney Company and 21st Century Fox already covered almost 90% of media output. Their horizontal merger only increased that rate.
- Takeda Pharmaceutical and Shire plc, $62 billion
Takeda Pharmaceutical is the largest pharmaceutical company in Asia, with headquarters in Japan. Shire plc was a US-based biopharmaceutical company with a great market presence in the United States. The eight-month-long acquisition deal between Takeda Pharmaceutical and Shire plc allowed Takeda to expand its geographic influence and, thus, increase its revenue and cash flows. This is Japan’s largest merger with a foreign company and one of the most interesting M&A deals of 2018, with a deal value of $62 billion.
- Comcast Corporation and Sky plc, $39 billion
Comcast Corporation and Sky plc are both telecommunications companies operating in slightly different markets — the United States and Europe. The $39 billion acquisition of Sky plc enabled Comcast Corporation to reduce competition and gain a better market presence. Lots of M&A experts believed that Comcast Corporation overpaid Sky plc. However, as a result, Comcast holds 75% of Sky’s share capital.
- ChemChina and Sinochem
The deal between ChemChina and Sinochem is considered one of the largest mergers in the chemical industry. ChemChina and Sinochem are both Chinese state-controlled companies. The reason for integration was mainly the consolidation of the agricultural assets, which would significantly increase the revenue. This resulted in a larger company named Syngenta Group, which is expected to become the innovation-driven leader in the market.
5 biggest mergers and acquisitions in 2019
- United Technologies and Raytheon, $135 billion
The successful merger of United Technologies and Raytheon is a great example of corporate acquisitions, as it kicked off the creation of the most advanced aerospace and defense systems producing company in the world. The main reason for the merger was the elimination of competition in supply, which would allow the merging companies to improve their market presence and increase revenue. The deal was closed at $135 billion.
- Bristol-Myers Squibb and Celgene, $74 billion
Bristol-Myers Squibb is a US-based multinational pharmaceutical company and one of the world’s largest pharmaceutical companies, with total revenue of almost $47 billion. Celgene is also an American pharmaceutical company that specializing mainly in immunology and cancer drugs. The $74-billion deal between these two corporations became one of the largest mergers in the pharmaceutical industry and gave the start to a global biopharma company with a focus on oncology and immunologic diseases.
- Saudi Aramco and SABIC, $69.1 billion
Saudi Aramco acquired 70% of Saudi Basic Industries Corporation (SABIC) from the Public Investment Fund (PIF). The total purchase price was estimated at $69.1 billion. These merger and acquisition transactions allowed Saudi Aramco to strengthen its presence in the global petrochemicals market and increase the oil demand among customers, which resulted in greater efficiency. The deal is often referred to as the largest merger in Saudi Arabia.
- Abbvie and Allergan plc, $63 billion
Abbvie acquired Allergan plc, the second-largest drug company in the market, for $63 billion. The companies that merged aimed to create a biopharmaceutical corporation with top positions in the market in such areas as hematologic oncology, immunology, and neuroscience. This merger allowed Abbvie to diversify its assets portfolio, resulting in long-term growth.
- Groupe PSA and Fiat Chrysler, $52 billion
The Groupe PSA and Fiat Chrystler merger came with splitting profits for both companies. PSA gained access to the American market, and Fiat Chrysler could reach PSA’s newer manufacturing facilities. This resulted in a new automobile company named Stellantis, which became the fourth-largest manufacturer by volume in the world. The deal was closed at $52 billion.
5 biggest mergers and acquisitions in 2020
- Unilever plc and Unilever N.V., $81 billion
Unilever plc acquired Unilever N.V. for $81 billion. The main reason for this merger was the company’s unification, resulting in a simplified legal structure, improved governance, and greater strategic flexibility. By the end of the deal, there was a single parent company — Unilever plc.
- Nippon Telegraph and Telephone and NTT Docomo, $40 billion
This merger and acquisition deal is considered one of the big mergers in the Japanese telecommunications industry. Nippon Telegraph and Telephone purchased the NTT Docomo for $40 billion. The companies aimed to cut prices through combined facilities and manufacturing. And since it’s a state-owned business, it would stimulate consumer spending elsewhere in the Japanese economy.
- AstraZeneca and Alexion Pharmaceuticals, $39 billion
AstraZeneca and Alexion Pharmaceuticals are both giants in the pharmaceutical market. The announced AstraZeneca’s $39-billion acquisition of Alexion Pharmaceuticals was promised to strengthen the combined company’s market presence and conquer more customers in the market. The expected outcome was to develop new medicines in the area of immunology and, thus, increase the cash flow.
- Liberty Global and Telefónica, $38 billion
In May, the British units of Liberty Global and Telefónica announced their joint venture. This transaction is expected to achieve £700 million in synergies. The goal was to integrate Telefónica’s British mobile operator O2 and Liberty’s Virgin Cable network company. The deal value was estimated at $38 billion.
- Salesforce.com and Slack Technologies, $28 billion
This deal is one of the most successful mergers and acquisitions examples of recent years. Salesforce acquired Slack for about $28 billion in December 2020. The main goal of this merger was to create a unique and highly technological ecosystem that would allow the combined entity to strengthen its market presence, gain access to new customers, and increase revenue and cash flows.
5 biggest mergers and acquisitions in 2021
- BHP Group Limited and BHP Group plc.
This deal is often considered the largest merger of 2021 in Australia. The simple reason for the integration of BHP Group Limited and BHP Group plc was the unification and formation of one strong mining corporation in the Australian market. This allowed the company to simplify the corporate structure and gain greater strategic flexibility, which is expected to result in a stronger portfolio and new growth possibilities.
- Discovery Inc. and AT&T (United States WarnerMedia), $43 billion
This deal is a good example of large recent company mergers in the media industry. Discovery Inc. acquired the WarnerMedia business for $43 billion. This transaction allowed companies to create the world-strongest media portfolio of content. Now, entertainment movies and education content are distributed under one brand, which gives the company new growth opportunities, strengthens its market presence, and increases the share value.
- Canadian Pacific Railway and Kansas City Southern, $31 billion
Canadian Pacific Railway purchased Kansas City Southern for $31 billion, which makes it one of the biggest mergers and acquisitions of recent years. This integration allowed the two companies to create the first direct railway that links Canada, the United States, and Mexico. Thus, this deal is expected to expand the company’s market share and revenue.
- Oracle Corporation and Cerner Corporation, $28.4 billion
The software-producing corporation Oracle announced the acquisition of the health IT company Cerner in 2021, but the deal was officially finalized only in June 2022. The estimated merger value is $28.4 billion. This combination allows Oracle to expand its influence in the healthcare industry by producing more healthcare products. Considering the fact that healthcare is now the largest and the most important vertical market in the world, this transaction is a perfect example of how a business can increase its revenue.
- Square Inc. and Afterpay, $29 billion
The merger and acquisition deal between an American financial services company and an Australian financial technology company was closed at $29 billion. The key reason for this transaction was the desire of both businesses to share the technology. It would allow them to produce even more financial services, and, thus, cover a broader range of customers’ needs, which inevitably leads to increased cash flows and revenue.
Overview of M&A deals in 2022: Current and forecasted
Below are the most prominent examples of public companies that have already announced the biggest M&A deals in 2022.
- Microsoft and Activision Blizzard, $68.7 billion
At the beginning of 2022, Microsoft announced its plans to acquire Activision Blizzard, an American leading video games provider. The deal’s value is estimated at $68.7 billion. With this acquisition, Microsoft plans to boost its growing metaverse strategy and accelerate the company’s growth in the gaming business across console, PC, and mobile devices.
- Broadcom Inc. and VMware, $61 billion
In May 2022, Broadcom Inc. announced its acquisition of VMware company at an estimated value of $61 billion. By the closure of this transaction, Broadcom will rebrand and operate under VMware. The expected results of the deal are accelerated innovation, enhanced production, and increased revenue.
- HDFC Bank and Housing Development Finance Corporation
India’s largest private lender HDFC Bank announced its merger with the Housing Development Finance Corporation (HDFC) in April 2022. The background of this deal is the goal to create a financial services giant in the market that will greatly improve the company’s presence and increase its revenue.
Note: To learn more about 2022 M&A trends, read our dedicated article.
The most successful worldwide deals of all time
The biggest merger and acquisition companies list of all time includes transactions whose values exceed a hundred billion dollars.
Let’s shortly review the three largest of them.
- Vodafone and Mannesmann, $202.8 billion
This deal is known as the biggest in history, with an estimated value of $202.8 billion. A Britain-based Vodafone acquired a Germany-owned Mannesmann in 1999. This transaction aimed to consolidate Vodafone’s position in Europe. As a result, it enabled Vodafone to become the world’s largest mobile operator.
- Dow Chemical and DuPont, $130 billion
Dow Chemical Company is an American multinational chemical corporation. DuPont was also a successful chemical company that specialized mainly in gunpowder mills. In August 2017, the companies announced that they had successfully completed their merger. As a result, DowDuPont corporation appeared. The total deal value is estimated at $130 billion, which makes it one of the biggest mergers and acquisitions in history.
- Gaz de France and Suez, $180 billion
These two French national companies announced their merger in 2007. The estimated deal value is around $180 billion. This transaction created the world’s fourth-largest energy company. An interesting fact about the deal: Nicholas Sarkozy hailed the new French giant creation.
The biggest failed deals of all time
Obviously, the bigger doesn’t always mean the better. Not all large mergers and acquisitions of companies resulted in a successfully combined entity.
Below are the brightest examples of the biggest failed M&A deals of all time.
- AstraZeneca and Gilead Sciences
The potential merger of AstraZeneca and Gilead Sciences was expected to become one of the largest in the biopharmaceutical industry. This was promised to open new growth opportunities for the combined entity. However, the deal was criticized by the M&A experts and never happened.
- Altria and Philip Morris International
The deal between two giant tobacco companies could become a great start for a new corporation that would expectedly gain a great market presence. The discussed deal value was estimated at $200 billion. However, the merger was called off. It happened mainly because of the cold investors’ reaction and the fact that Altria was considering the investment in the vaping company, while the number of vaping-related diseases increased in the world.
- Pfizer and Allergan, plc.
The Pfizer and Allergan merger promised to become one of the largest M&A deals in history, with an estimated transaction value of $160 billion. Nonetheless, the deal did not happen because of the announced changes to tax inversion legislation made by the U.S. Government.
The number of large top mergers and acquisitions in the investment history speaks volumes about the industry’s potential.
Executives considering mergers as another growth opportunity should consider many points before entering the deal. After all, even the most promising transaction can fail because of the lack of required research and distorted perspective.