Earlier this year, American cable giant Comcast called off a potential merger with Time Warner Cable after coming under a firestorm of criticism from consumer groups and U.S. anti-trust authorities. The $45 billion merger would have brought together the US’s two largest cable companies and given one company control of as much as 57% of the broadband internet market. Mergers and Acquisitions (M&A’s) are a major part of the corporate world, and while some deals fall through, the shakeups often result in tremendous changes across various industries and ultimately have a great impact in the global economy.
In this list, we examine 5 stunning mergers and acquisitions made by major companies.
Facebook acquires Instagram and Whatsapp
Year: 2012 and 2014
Acquisition Price: $1 billion and $19 billion
In 2012, social media powerhouse Facebook acquired mobile photo-sharing service Instagram for $1 billion. At the time it was Facebook’s biggest acquisition ever in scale and cost, and CEO Mark Zuckerburg went on record to say, “We don’t plan on doing any more of these if any at all”.
But just two years later, Facebook stunned the mobile world by acquiring instant messaging service Whatsapp for $19 billion. The purchase was followed by some controversy as Whatsapp users raised concerns about potential privacy violations under Facebook’s ownership.
Apple acquires NeXT
Acquisition Price: $429 million
Industry: Computer Hardware and Software
In 1996, Apple purchased the computer firm NeXT for $429 million. NeXT was founded by Steve Jobs after he was forced out of Apple in 1985, and the acquisition saw Steve Jobs return to Apple as CEO.
Upon his return, Steve Jobs restructured the company’s board of directors and oversaw the development of Apple’s new operating system, Mac OS X.
Daimler-Benz acquires Chrysler
Acquisition Price: $37 billion
In 1998, the German automobile conglomerate Daimler-Benz merged with Chrysler for $37 billion. At the time, this was the biggest acquisition by a foreign buyer of any U.S. company in history.
The resulting formation of DaimlerChrylser AG was marred by a class-action lawsuit filed by investors who felt that the sale amounted to a hostile takeover of Chrysler by Daimler-Benz. Poor performance by Chrysler after the merger amounted to the company reporting losses of $1.5 billion in 2006, and by 2007, Chrysler was sold to American private equity firm Cerberus Capital Management for $7.4 billion.
Pfizer acquires Warner-Lambert
Acquisition Price: $110 billion
In February of 2000, American pharmaceutical giant Pfizer paid $110 billion to acquire fellow U.S. based Warner-Lambert. The sale, which was made up of $90 billion in stock and $20 billion in cash, resulted in Pfizer becoming world’s second largest drug company.
AOL acquires Time Warner
Acquisition Price: $164 billion
In 2000, America Online Inc. (AOL) completed the acquisition of media company Time Warner Inc. for a stunning $164 billion in a bid to create a digital powerhouse. The move that was called “the biggest mistake in corporate history” by Time Warner Chief Jeff Bewkes coincided with the burst of the dot-com bubble, and resulted in AOL Time Warner reporting a loss of $99 billion in 2002 — the largest loss ever reported by a company at the time.
The company’s valuation also dropped over $200 billion in less than two years, and ultimately resulted in AOL being spun off as an independent company in 2009.