Biggest Mergers and Acquisitions Examples List
- Vodafone and Mannesmann (1999) - $202.8B. As of June 2022, the largest acquisitions ever made was the takeover of...
- AOL and Time Warner (2000) - $182B. When we mentioned at the outset of this article that ‘ big doesn’t always mean...
- Gaz de France and Suez (2007) - $182B. France loves its national champions - the...
What does acquisition mean in business?
What is an Acquisition?
- Acquisition vs. Merger. ...
- Benefits of Acquisitions. With M&A, a company is able to enter into new markets and product lines instantaneously with a brand that is already recognized, with a good reputation and ...
- Challenges with Acquisitions. ...
- Key Takeaways. ...
- Additional Resources. ...
What is a business acquisition?
At present, by acquisition of a business, we mean the accounting entries involved in the purchase of a business of a non-corporate body by a corporate body. The business of a sole trader or a firm may be converted into a company or the business may be sold to an existing company.
What are the types of acquisition methods?
Top 4 Types of Acquisition
- Horizontal Acquisition. This is when a company acquires another company in the same business, or industry or sector, that is, a competitor.
- Vertical Acquisition. This is when a company acquires either a supplier of inputs or a distributor of its products or the company to which it sells its products.
- Conglomerate Acquisition. ...
- Congeneric Acquisition. ...
What is business acquisition strategy?
Acquisition strategy involves finding a methodology for the acquisition of target companies that generates value for the acquirer. The use of an acquisition strategy can keep a management team from buying businesses for which there is no clear path to achieving a profitable outcome.
What happens when a business is handed over?
When the entire business is handed over, liabilities along with assets including Cash at Bank and in hand are taken over by the purchasing company. Here the liabilities mean external liabilities (the amount payable to third parties) and assets mean non-fictitious assets.
What is a nominal commission for a vendor?
The purchasing company may charge a nominal commission for the job done on behalf of the vendor. Alternative to the above, the purchasing company takes the responsibility of collection of debtors and paying off the creditors, as an agent for the vendor.
Is there a loss or gain in a capital gain?
It may be noted that there may be either capital loss or capital gain. If there is a gain, then there cannot be a loss: similarly, if there is a loss, then there cannot be a gain, out of the same transaction.
Is the excess amount of capital profit credited to capital reserve?
In certain cases the amount paid may be less than the net assets acquired, then the excess amount i.e., the capital profit is to be credited to Capital Reserve. When the value of net assets is calculated, it must be remembered that the revised values of assets and liabilities are taken into account.
When did the UK merge with pharmaceutical companies?
The merger of the UK’s two largest pharmaceutical firms in 2000 led to what is currently the 6th largest pharmaceutical firm in the world, and the only British firm in the top 10.
What was the largest acquisition of Vodafone in 2021?
1. Vodafone and Mannesmann acquisition (1999) - $202.8B. As of January 2021 the largest acquisition was the takeover of Mannesmann by Vodafone occurred in 2000, and was worth ~ $203 billion. Vodafone, a mobile operator based in the United Kingdom, acquired Mannesmann, a German-owned industrial conglomerate company.
Who bought Mannesmann in 2021?
As of January 2021 the largest acquisition was the takeover of Mannesmann by Vodafone occurred in 2000, and was worth ~ $203 billion. Vodafone, a mobile operator based in the United Kingdom, acquired Mannesmann, a German-owned industrial conglomerate company.
Definition and basics
Many departments on both sides have to be involved in a business merger. Photo: © Sergey Nivens/Adobe Stock
Reasons and advantages
There are many different reasons for companies to merge. The reasons can be found at the individual company level as well as in general market developments. For example, a company may want to strengthen its competitiveness because it does not feel able to keep up with rapid market developments on its own.
The different forms and directions in detail
Parallel to the basic models of cooperation, concentration and merger described above, business administration describes three directions in which mergers can go: – Horizontal merger: Agreed between companies with the same production or trading level in order to strengthen their market position.
Forms of cooperation
Essentially, four concrete forms of cooperation can be distinguished: – The occasional company is a cooperation of independent companies for a limited period of time. It can take the form of a consortium, in which the cooperation is focused on a specific project, or it can take the form of a consortium.
Forms of concentration
If the economic independence of the companies is to be relinquished, the resulting concentration can take two forms: – Combined as a group, the member companies retain their legal independence.
Requirements
The corporate cultures of the individual companies are the linchpin of mergers. Photo: © fizkes/Adobe Stock
Disadvantages and risks
Of course, a corporate merger does not always work out to the advantage of all involved. Most of the time this is due to the disregard of the individual corporate cultures.
Example #1 – Amazon Acquires Whole Foods Market
Example # 3 – Microsoft and LinkedIn
- Microsoft acquired LinkedIn for $196 per share to a $26 billion deal and fought with its competitor Salesforce.com, Inc. The shares of LinkedIn rose 64% after the announcement was made. It was an all-cash deal and included all of LinkedIn’s net cashNet CashNet Cash represent the company's liquidity position and is calculated by deducting the current liabilities from the cash balance repo…
Conclusion
- There are various methods by which one can conduct acquisitions. It can either be friendly or hostile. As seen in the above examples of acquisition, only a large company does not need to have the capacity to acquire a small company. It is also possible the other way around, as highlighted in the Ranbaxy Laboratories Ltd. and Sun Pharmaceutical Industries Ltd. deal. The company need…
Recommended Articles
- This article has been a guide to acquisition examples. Here, we discuss the top 4 practical examples of acquisitions like Amazon acquiring Whole Foods Market, Microsoft, LinkedIn, Disney and 21st Century Fox, etc. You can learn more about financing from the following articles: – 1. Types of Acquisition 2. Mergers vs. Acquisitions 3. How to Finance an Acquisition? 4. Typesof …
What Does The Acquisition of A Business Mean?
Purchase Consideration
- The vendor firm (i.e., the firm selling the business) and the vendee must agree on the price of acquiringthe business. The purchase price, or purchase consideration, is the price payable by the purchasing company to the vendor as a consideration for the business taken over. This price is determined by an agreement between the vendor and vendee. The...
Accounting Treatment For The Acquisition of A Business
- In accounting, there are two ways to treat a business acquisition:(A) New set of books are opened; and (B)the same set of books are continued.
Vendor’S Debtors and Creditors
- Sometimes, the purchasing company does not take over the book debts and trade liabilities belonging to the vendor. This is because the complete recovery of the amount against book debts may not be possible and trade liabilities may be more than the estimated figure. For this reason, taking over the vendor’s debtors and creditorscomes with an associated risk. In certain cases, th…
Definition and Basics
Reasons and Advantages
- There are many different reasons for companies to merge. The reasons can be found at the individual company level as well as in general market developments. For example, a company may want to strengthen its competitiveness because it does not feel able to keep up with rapid market developments on its own. The desire to expand their own market position also drives ma…
The Different Forms and Directions in Detail
- Parallel to the basic models of cooperation, concentration and merger described above, business administration describes three directions in which mergers can go: – Horizontal merger: Agreed between companies with the same production or trading level in order to strengthen their market position. Examples of such mergers are the union of bakery A an...
Forms of Cooperation
- Essentially, four concrete forms of cooperation can be distinguished: – The occasional company is a cooperation of independent companies for a limited period of time. It can take the form of a consortium, in which the cooperation is focused on a specific project, or it can take the form of a consortium. The latter is usually founded to increase the financial strength of the participants an…
Forms of Concentration
- If the economic independence of the companies is to be relinquished, the resulting concentration can take two forms: – Combined as a group, the member companies retain their legal independence. If one company is dominant and at least one other is subordinate, this is called a subordinate group. In contrast, a group of equals is a merger of companies of equal standing. T…
Requirements
- In addition to the aforementioned contractual fixation of the cooperation, the voluntary nature of all sides is also a basic characteristic of a corporate merger. Only if the individual companies show a genuine willingness to cooperate and mutually exchange all relevant resources can such a cooperation be successful and lead to the desired goal. Solid financing, sufficient personnel an…
Disadvantages and Risks
- Of course, a corporate merger does not always work out to the advantage of all involved. Most of the time this is due to the disregard of the individual corporate cultures. If these are neglected when planning the integration process, the cooperation is doomed to failure, because then the companies have to deal too much with themselves. As a result, the existing business and the ac…
Prominent Examples
- Overall, the number of corporate transactions on the market that reflects takeovers and mergers has declined in recent years. As a survey by the imaa Institute revealed, even before the Corona crisis, the “Mergers & Transactions Volume Acquisitions” industry reached a low of US$3.5 trillion in 2019, a level last seen in 2013. The crisis further depressed mergers and acquisitions: in 2020…
Merger in The Housing Market
- A current example of a controversial merger in Germany is that of the two largest private housing companies, Deutsche Wohnen and Vonovia. The latter has made a takeover offer of 18 billion euros to the former. In 2016, when an attempt was already made by Vonovia to swallow Deutsche Wohnen, its shareholders and CEO Michael Zahn still rejected this. An agreement apparently fail…
Most Expensive Transaction in The Mobile Phone Market
- The biggest takeover in economic history took place right at the beginning of the new millennium. In February 2000, the British mobile phone company Vodafone swallowed the German industrial group Mannesmann for the equivalent of about 180 billion euros. This was preceded by a lengthy back and forth between the two sides. Mannesmann originally started out as a producer of stee…