Tag Archive for 'M&A'

For Google, a New High in Deal-Making

Published on October 31, 2011 in High Tech & Media and Social Media. 0 Comments Tags: , .

With 57 completed deals under its belt this year, Google has already smashed its 2010 record of 48 acquisitions — and it is only October.

According to a filing submitted on Wednesday, Google announced it had spent $1.4 billion in the first nine months of 2011 on acquisitions.

That tally includes its $151 million purchase of Zagat, the online restaurant reviews site, $114 million for Daily Deals and $676 million for ITA Software, the travel software company.

Beyond those three transactions, Google largely focused on completing smaller transactions of $10 million or less. The remainder of its deals, 54 in all, accounted for about [Source].

Related stories: Google Cranks Up M&A Machine; Inside Google’s M&A machine: 3 months, $145 million, 9 deals; Google M&A boss presides over record year.

China: growing taste for European M&A

Published on October 27, 2011 in Emerging Markets and Global Strategy. 0 Comments Tags: , , .

Chinese companies are increasing their appetite for corporate acquisitions in Europe.

As Jamil Anderlini writes in today’s FT, the Rhodium Group, an economic consultancy, predicts Chinese groups will invest up to $1,000bn in overseas acquisitions over the next decade, with a big slice of this investment heading to Europe.

In the past decade, China has mostly focused on companies in the US and Australia, as the chart below shows. But wobbly stock markets and declining valuations in Europe have also made assets there attractive.

Europe is China’s most targeted region this year, attracting more than $12bn via 64 deals, and accounting for nearly 30 per cent of all Chinese outbound M&A in terms of deal value, according to Dealogic. This is up from just $2.5bn via 35 deals during the same period a earlier year, accounting for only 6 per cent of total Chinese outbound M&A [Read more].

Intel Capital invests $24 million in seven new companies

Published on September 8, 2011 in Global Strategy. 0 Comments Tags: , , , .

Intel Capital announced today it has invested $24 million in seven new startups. And so far this year, Intel said that it has seen two initial public offerings and 10 acquisitions from its portfolio of investments in startups.

The new investments include five new software start-ups and two follow-on investments. Since the company is a strategic corporate investor, it shoots for both a financial return and investments that help Intel’s strategic interests. The deals show Intel isn’t slowing down its investments despite a slow world economy [Read more].

Sony, Hitachi and Toshiba to Merge LCD Units

Published on August 31, 2011 in Global Strategy. 0 Comments Tags: , , , , , .

Sony, Toshiba and Hitachi announced on Wednesday that they would work with a government-backed fund to spin off and merge their liquid crystal display businesses, joining forces in the face of rising global competition.

The deal could create the world’s biggest maker of LCDs for mobile phones and cameras, with 22 percent of the market for small and
midsize screens, according to DisplaySearch.

The fund, the Innovation Network Corporation, will invest 200 billion yen ($2.6 billion) in the new company for a 70 percent stake, while the three manufacturers will equally split the other 30 percent, they said in a statement.

The Japanese government has long encouraged the nation’s manufacturers to consolidate as a way to increase their presence in global markets and better fight mounting competition from rivals like Samsung Electronics of South Korea, which is now far bigger and profitable than any single Japanese electronics maker [Source].

Google’s Strategic Mistakes Drove Motorola Buy

Published on August 25, 2011 in Global Strategy. 0 Comments Tags: , .

Google’s USD$12.5 billion purchase of Motorola Mobility has set the technology and investing worlds aflutter, with much of the commentary positioning it as a play by Google for Motorola’s strong IP portfolio. But a single point of focus is incorrect and misses a bigger point: The MMI purchase is the result of Google’s miscalculations about the way value is captured in mobile computing. These strategic missteps placed Google in a position of weakness and forced it into a costly and desperate move.

When it took its approach to mobile software, Google made a big bet that smartphones and tablets were sufficiently mature and thus could be built in a way that didn’t require Google owning all points of the value chain. For the last year it seemed that Google bet right. Android was very quickly adopted by licensees to the point that it achieved nearly 50% share in smartphone shipments last quarter.

However, lately, cracks began to appear in the strategy. Issues with intellectual property in Android caused some licensees to have to pay royalties to patent holders, increasing the cost. Fragmentation took hold where some versions of the software were used by some licensees on some products without the option or incentive to upgrade. Finally, some vendors modified the software resulting in missing features or inconsistent user experiences — even to the extent that Google’s own services were omitted [Source].

Twitter officially acquires Tweetdeck

Published on May 25, 2011 in Real-Time Web and Social Media. 0 Comments Tags: , , .

After plenty of speculation and reports, Twitter announced officially today on its blog that the company had acquired popular third-party client Tweetdeck.

“This acquisition is an important step forward for us,” the company wrote. “TweetDeck provides brands, publishers, marketers and others with a powerful platform to track all the real-time conversations they care about. In order to support this important constituency, we will continue to invest in the TweetDeck that users know and love.”

After Twitter’s purchase of iPhone app Tweetie and its partnership with TwitPic, it wasn’t exactly shocking to hear the company wanted to buy one of the most popular third-party Twitter clients, which has versions available for desktop, iPhone, iPad, and Android. The company has indicated in the past it wanted to better control the user experience, and such, acquisitions like this are the easiest way to accomplish that goal [Source].

Consolidation of the Food Industry

Published on November 26, 2010 in Global Strategy. 0 Comments Tags: .

The buyout of Del Monte Foods is the latest in a series of multibillion-dollar deals in the food industry this year, including the $19.5 billion takeover of Cadbury by Kraft Foods, and Coca-Cola’s $13.6 billion purchase of Coca-Cola Enterprises’ North American operations.

Many in the sector expect more deals to come as legacy brands look for growth opportunities and private equity firms pursue cash-rich companies [Source].

“There has been a lot of mergers and acquisitions activity in this space,” said Farha Aslam, an analyst with Stephens. “Food companies typically have very strong cash flow and many have worked down their debt levels.”

Another Technology Bubble?

Published on November 24, 2010 in International Business. 0 Comments Tags: , , , .

Is the world ready for another Internet bubble?

Ready or not, it appears to be coming. In fact, it may already be here. And it seems to look, not surprisingly, like the last Internet bubble [Source].

First, there’s plenty of deal flow. Dealogic data shows that the number of technology deals — more than 5,100 so far this year — is at its highest point since the year 2000. Back then, in the peak year for Internet deal-making, there were 7,007 technology mergers and acquisitions.

At the Web 2.0 Summit, Venture capitalists John Doerr said technology was in the middle of a third wave of innovation. (The previous two waves were the PC revolution in the 1980s and the Internet boom in the mid-1990s.) The current wave, he said, is focused on smartphones and social networking — or “social graphs” as he called them.

Doerr: I prefer to think of these bubbles as booms. I think booms are good. Booms lead to overinvestment, booms lead to full employment, booms lead to lots of innovation. You know, there was a boom when they started the railroads. We’re in another bubble — or boom — and it’s an exciting time [Source].

M&A to Hit $3 Trillion in 2011

Published on November 16, 2010 in International Finance. 0 Comments Tags: , .

Global mergers and acquisitions activity is expected to rocket upward 36% next year to $3.04 trillion, getting its strength from the financial and real estate industries, according to a report released Monday by Thomson Reuters.

The report also predicted that two sectors would shine in 2011 for deals: real estate and financial firms. After being pummeled by the credit crisis, many companies from these industries will need to restructure their businesses, pursue consolidation, divest assets or simply play catch-up [Source]. Also check another post on private equity thrives again.

“Financials seem to be the most bullish on a percentage basis,” Mr. Toole said. “This year we saw Goldman Sachs divesting its prop trading desk. … Now we’ll see it on a fuller scale.”

Private Equity Thrives Again

Published on October 6, 2010 in International Finance. 0 Comments Tags: , , .

The private equity industry has emerged from a treacherous two years on relatively solid footing. Default rates among the companies they control have dropped sharply and many have tapped into robust debt markets to push back the huge amounts of debt coming due in the next couple of years.

And private equity’s deal-making machine is revving up again. Last month, 3G Capital struck a deal to take Burger King private in a $3.3 billion leveraged buyout. Other firms are prep-ping holdings for initial public offerings so they can return capital to their investors, who have seen little in the way of profits in recent years.

Private equity, however, may soon be facing its gravest challenge yet. Its most important constituents — the large public pension funds that provide it with more than half its capital — are weighing whether or not to stick with private equity in the coming years [Source].