The tech market has been the top sector in terms of M&A activity for several years according to annual reports, and 2023 was no exception.
Rapid technological advancements and companies’ urge to find new solutions to keep up with global IT development result in dynamic M&A activity, driving lots of large tech industry mergers.
In this article, we dive into the historical context of M&A in the technology sector, listing the 11 biggest acquisitions in tech of all time.
Historical context of tech M&A
Early developments in the tech sector started between the 1970s and 1980s, with the rise of personal computers and tech giants such as Apple and Microsoft.
Then, in the 1990s, came the dot-com boom that resulted in a surge in tech M&A activity. Many tech companies wanted to capitalize on emerging internet technologies and market opportunities.
Despite the subsequent bursting of the dot-com bubble, the tech sector, and M&A activity within it, continued to grow, hitting $1.24 trillion worldwide at its peak in 2021.
Rapid growth in tech industry acquisitions helps develop the sector as a whole. It accelerates innovation and competitiveness, enhances global reach, and brings modernization and digitalization to the world.
Top 11 biggest tech M&A deals
Now, let’s review the 11 biggest tech acquisitions in history.
1. Microsoft and Activision Blizzard
Year: 2023
Deal value: $69 billion
Microsoft announced its plans to acquire Activision Blizzard in 2022, and the deal was completed in 2023 after passing review from the Federal Trade Commission in the US and Competition and Markets Authority (CMA) in the UK ensuring there’s no breach in the competition law.
With this acquisition, Microsoft aimed to give Xbox an advantage in the gaming market. Activision Blizzard is one of the world’s largest video game companies that created such famous games as Warcraft, Call of Duty, and Candy Crush.
2. EMC and Dell
Year: 2016
Deal value: $67 billion
Dell’s acquisition of EMC, a leading provider of data storage, information security, virtualization, and analytics, was probably the biggest tech M&A deal in history at a time — it’s valued at $67 billion.
The combined company enables organizations to unite Dell’s hardware expertise with EMC’s advanced data storage and management capabilities.
During the acquisition, Dell had to go through many regulatory and legal obstacles, including waiting for approval from the Chinese government.
Two years after the deal was closed, Dell returned to public markets, listing on the New York Stock Exchange.
3. AMD and Xilinx
Year: 2022
Deal value: $49 billion
The deal between AMD, a semiconductor company that develops computed processors and related technologies, and Xilinx, also a technology and semiconductor company, was announced in 2020 and completed in 2022.
Upon its announcement, the deal value was estimated at approximately $35 billion. However, it rose significantly over two years while the companies dealt with all the regulations, finally reaching $49 billion upon closure.
The merger aimed to leverage Xilinx’s leadership in configurable circuitry and adaptive computing solutions, complementing AMD’s high-performance CPUs and GPUs to create a diversified and robust technology portfolio.
4. Avago and Broadcom
Year: 2016
Deal value: $37 billion
Avago announced its acquisition of Broadcom, a provider of semiconductor solutions for wired and wireless communication and a supplier of connectivity chips to Apple and Samsung, in 2015. The deal was finalized in 2016.
The rationale behind the deal was to combine Broadcom’s strengths in communications semiconductors with Avago’s expertise in wired infrastructure, wireless communications, enterprise storage, and industrial markets. Thus, combined capabilities were planned to enhance competitive positioning and market reach.
The newly merged tech company got the name Broadcom Limited and was valued at $77 billion in enterprise value.
5. IBM and Red Hat
Year: 2019
Deal value: $34 billion
Red Hat is the world’s leading provider of enterprise open-source solutions and IBM is a tech company that offers services in cloud computing, AI, digital workspace, and cybersecurity.
IMB’s acquisition of Red Hat is an all-cash deal that’s considered one of the biggest tech mergers and acquisitions. This transaction aimed to combine IBM’s extensive enterprise IT and cloud capabilities with Red Hat’s open-source expertise, especially in hybrid cloud environments.
Explore the top recent cybersecurity M&A deals as reported in M&A Community in June 2024.
6. Salesforce and Slack
Year: 2021
Deal value: $27.7 billion
Salesforce, a cloud-based software company, announced its acquisition of Slack, a cloud-based team communication platform, at the end of 2020. The deal is considered one of the largest software acquisitions and successful merger examples. It was closed at $27.7 billion in 2021.
The rationale behind the acquisition was to merge Slack’s widely used platform with Salesforce’s customer relationship management (CRM) tools, creating a unified ecosystem for enterprise communication and collaboration.
Together, Slack and Salesforce Customer 360 will give every company in the world a single source of truth for their business and a single platform for connecting employees, customers, and partners with each other and the apps they use every day.
Bret Taylor
President and COO of Salesforce
7. Microsoft and LinkedIn
Year: 2016
Deal value: $26.2 billion
In June 2016, Microsoft and LinkedIn jointly announced that Microsoft buys LinkedIn, with the deal completing by the end of December that year.
The acquisition aimed to integrate LinkedIn’s B2B sales tools with Microsoft’s business software to improve prospecting and synergies between the networking and tech company. Upon the deal closure, it was agreed that LinkedIn would retain its brand and culture together with its CEO Jeff Weiner.
Together we can accelerate the future growth of LinkedIn, as well as Microsoft Office 365 and Dynamics as we seek to empower every person and organization on the planet.
Satya Nadella
Microsoft CEO
8. HP and Compaq
Year: 2002
Deal value: $25 billion
Though being one of the largest acquisitions in tech at the time, the deal between HP and Compaq is often held up as an example of an M&A failure.
HP’s board of directors opposed then-CEO Carly Fiorina‘s decision to enter the deal with Compaq. Fiorina resigned 4 years after the deal, when merged HP lost half of its market value.
It’s worth noting that HP made another disastrous acquisition later in 2011 when it acquired UK software company Autonomy for $11 billion. This led to a fraud lawsuit and allegation for Autonomy’s founder. HP sold a company to Micro Focus in 2016.
9. Facebook (Meta) and WhatsApp
Year: 2014
Deal value: $19 billion
Many M&A experts consider then-Facebook’s (now Meta) acquisition of WhatsApp one of the most successful mergers.
Facebook’s acquisition of WhatsApp allowed Facebook to gain access to WhatsApp’s large and rapidly growing user base, especially in international markets where Facebook had less reach. This aims to accelerate Facebook’s ability to bring connectivity and utility to the world.
10. Silver Lake and Qualtrics
Year: 2023
Deal value: $12.5 billion
This acquisition was completed in 2023.
Silver Lake is a global private equity firm that focuses on technology investments. Qualtrics is an experienced management company specializing in data analysis services and data collection platforms, as well as offering online survey software.
In 2018, SAP acquired Qualtrics for $8 billion but soon sold a minority stake, remaining a go-to-market partner and serving their joint clients.
In 2023, SAP sold all the Qualtrics shares to Silver Lake.
11. Adobe and Marketo
Year: 2018
Deal value: $4.75 billion
Marketo was initially a private company offering marketing automation software that went public in 2013. In 2016, it was acquired for $1.8 billion by Vista Equity Partners, an American private equity firm known for its investing in tech businesses and software acquisitions.
Two years later, it was acquired by Adobe for $4.75 billion. The acquisition aimed to enhance Adobe’s Experience Cloud by integrating Marketo’s robust B2B marketing automation platform and industry expertise, providing a comprehensive solution for both B2B and B2C marketing.
Key takeaways
- The tech industry was the top sector in terms of M&A activity for many years, and 2023 was no exception.
- The market peaked with a combined deal value of $1.24 trillion worldwide in 2021.
- The most successful tech merger transactions include deals between Facebook and WhatsApp, IBM and Red Hat, Microsoft and Activision Blizzard, and Microsoft and LinkedIn.
