You might have heard the phrase ‘big fish must eat small fishes to survive’. There are numerous reasons why acquisitions happen:
- To increase growth in future
- To acquire patents/technologies
- To shut down a rising competitor in the market.
These deals usually involve astonishingly high price tags. Recently, Microsoft bought GitHub for $7.5 billion in stock. Yep, we all have heard about this deal, but do you have knowledge about other big buys.
We are representing some of the biggest and most expensive deals in the tech industry till this date. The buyout price ranges between $1 to $34 billion. It’s quite interesting that out of these 29 acquisitions, Microsoft is featured in 5 deals, and the top 10 deals of 2018 totaled over $87 billion.
30. Facebook buys Instagram for $1 Billion
Facebook offered $1 billion for photo and video sharing app Instagram in April 2012. As of September 2013, Instagram has set up more than 150 million users. It was also listed among top 50 Android apps in 2013. After this deal, Instagram grew up by 23 %, whereas Facebook only by 3%. As of 2018, Facebook had 2.3 billion users, while Instagram had over 1 billion users worldwide.
29. Yahoo buys Tumblr for $1.1 Billion
Tumblr is microblogging and social networking site owned by Yahoo since May 2013. This is the biggest deal ever done by Yahoo in history under the leadership of Marissa Mayer (former CEO of Yahoo). Since then Tumblr has shown no sign of dropping down. The service is more popular among teenage and college students. As of January 2018, Tumblr is the 8th most popular social platform with more than $157 billion posts.
28. eBay buys PayPal for $1.5 Billion
eBay bought PayPal in exchange of $1.5 Billion in June 2002. It is an international e-commerce business which allows money transfer and payment through the internet. PayPal operates in more than 200 markets and manages more than 225 million accounts. As of 2017, Paypal’s total payment volume processed was over $450 Billion, with annual payment revenue of $13 billion.
27. Google buys YouTube for $1.65 Billion
Internet search giant bought the video-sharing site in October 2006 from its founders, Steve Chen and Chad Hurley for $1.65 billion. Since then YouTube has gone through a lot of changes in terms of look, feel and performance. As of 2018, the site has 1.3 billion unique visitors per month, 300 hours of video being uploaded every minute, and over 5 billion videos being watched every day.
26. Vista Equity Partners Buys Apttio – $1.94 billion
The American private equity and venture capital acquired Apitto in 2018 by paying $38 per share. Apitto is a Seattle-based company that helps businesses manage and understand their cloud spending. Vista paid a 53% premium for stockholders, and the deal was approved by Apptio’s board of directors.
25. Twilio buys SendGrid for $2 billion
Twillo, a cloud communication platform, spent $2 billion (all in the stock transaction) to get an API-based email service, SendGrid. The deal was no surprise, both companies share the same vision, the same values, and the same model.
24. Cisco Buys Duo Security for $2.35 billion
Cisco has bought more than a hundred companies since its inception. And more than a dozen of these acquisitions have cost them over a billion dollar. In 2018, they added Duo Security to its subsidiary. The company paid $2.35 billion in cash to acquire another cloud-based cybersecurity company named Duo Security.
Cisco built the modern IT infrastructure, and now it will help Duo Security to accelerate the mission of securing users’ access to any application in any device at massive scale.
23. Dell Buys Quest Software – $2.36 Billion
Quest is a software manufacturer and supports almost all kinds of infrastructural software. The company is best known for manufacturing TOAD, a product used by database developers. It offers many other products that help in creating, managing, monitoring software and application. On 2nd July 2012, Dell announced that it was buying Quest for $2.36 Billion.
22. SAP buys CallidusCloud for $2.4 Billion
Unlike other tech giants, SAP doesn’t usually make many acquisitions. However, they did buy CallidusCloud in 2018 for $2.4 billion or $36 per share. The share price is an impressive bump for shareholders, representing a 21% premium over the 30-day average price.
CallidusCloud is best known for its cloud-based solutions for sales performance management and sales execution software and services. SAP provides CallidusCloud the global scale to increase its already phenomenal growth.
21. Microsoft Buys Minecraft – 2.5 Billion
Microsoft has bought Mojang, the Swedish firm best known for developing a popular independent game Minecraft. The deal was announced on 15th September 2014. Minecraft is one the top-selling apps on both Apple store and Google Play. It has been also released for Xbox One and PlayStation 4. It is expected that this deal will attract more users to Microsoft windows phone.
20. Google Buys Nest Labs- $3.2 Billion
Nest Labs is a home automation company that creates wifi enabled, self-learning, smoke detector, and advanced thermostats. The co-founder is none other than the creator of iPod, Tony Fadell. The deal makes it obvious that Google is not only going to improve their search engine algorithm in the future, but they are also ready to make your home system automated.
19. Adobe Buys Marketo For $4.75 Billion
In September 2018, Adobe Systems unveiled that it was buying Marketo — a company focused on account-based marketing — for a total of $4.75 billion. The deal strength the Adobe’s lead in customer experience across B2B and B2C contexts.
In the same year, they bought Magneto — an open source eCommerce platform — for $1.68 billion with a view to integrating it into Adobe Experience Cloud, its Enterprise Content Management platform.
18. Verizon Buys Yahoo – $4.8 Billion
Verizon is buying the pitiful remains of what used to be the king of the Internet. Yahoo is probably the most mismanaged giant tech company ever. They had the opportunity to expand beyond the core of the search business, and they screwed it all up.
The shareholders will keep the Yahoo’s lucrative investments in Chinese eCommerce giant Alibaba and Yahoo Japan. They will split into a separate, publicly traded company. The deal also excludes Yahoo’s cash and some patents.
17. Salesforce Buys MuleSoft for $6.5 billion
In 2018, Salesforce bought MuleSoft — an integration software company for connecting data, applications, and devices — for $6.5 billion. They paid $44.89 share for MuleSoft, a 36% premium. Also, the deal values each MuleSoft share at $36 in cash and 0.071 shares of Salesforce stock.
As Salesforce is working on its AI and machine learning layer, it requires access to huge amounts of data across the company. A company like MuleSoft can make their job easier.
16. Microsoft Buys Nokia – $7.2 Billion
Once upon a time when Nokia was the leader of Mobile market, but in recent years Android platform has destroyed their all customer trust and selling values. Microsoft has decided to give a tough competition in the mobile market by buying Nokia mobile unit for more than $7 billion that includes mapping services, patent portfolio, and 32,000 employees.
15. Oracle Buys Sun Microsystems – $7.4 Billion
Sun Microsystem sold Information technology service, Computer component, and software and created a Java programming platform and Network File System (NFS). Oracle buys struggling Sun Microsystems and its Java programming language for $7.4 billion in April 2009. This deal kept Java away from IBM’s hands.
14. Microsoft Buys GitHub – $7.5 Billion
From left: Chris Wanstrath (GitHub CEO), Satya Nadella and Nat Friedman (VP Developer Services, Microsoft)
On June 4, 2018, Microsoft confirmed they will be acquiring GitHub – the biggest software development platform. They are paying $7.5 billion in stock in the deal.
It’s not hard to figure out why Microsoft would want to buy GitHub. In 2017, they shut down their own Github competitor, Codeplex. Microsoft now has over a thousand developers actively pushing code to GitHub repositories. In fact, Microsoft is the top company with the most open source contributors on Github.
In coming years, Microsoft will use their partner channels, direct sales, global cloud infrastructure and services to accelerate enterprise developers’ use of Github.
13. SAP Acquires Qualtrics For $8 Billion
SAP paid a whopping $8 billion to buy Qualtrics just before its IPO. It’s a fast-growing scrappy provider of survey and feedback software. The deal amazed a lot of people, as SAP paid over 20 times the revenue of Qualtrics.
While SAP has generated billions selling operation software, Qualtrics is entering into a new area what they call experience software, which allows organizations to manage the four key experiences of business: product, customer, employee and brand experiences, all on one platform.
12. Microsoft Buys Skype – $8.5 Billion
Skype is an instant messaging client and a free voice IP service that was owned by eBay in 2005 for $3.1 billion. They sold it off to private investors at 40% loss. Microsoft bought Skype in May 2011 for $8.5 billion. Since then Skype comes preinstalled on every Windows platform.
11. Hewlett-Packard buys Autonomy – $10.24 Billion
HP bought the British Enterprise Software Company, Autonomy in August 2011. Later, at the end of 2012, they admitted that they had overpaid. After a year HP claimed that there was serious accounting scandal found in the company. The incharge Leo Apotheker and CEO Mike Lynch were fired when autonomy failed to reach target revenue.
10. Google buys Motorola Mobility – $12.5 Billion
Google bought the handset business Motorola for twelve and a half billion in August 2011 to challenge Apple in the Smartphone market and they failed to do that. In less than 3 years, Google sold Motorola to Lenovo (including 2,000 patents) for $2.91 billion.
9. Amazon Buys Whole Foods – $13.7 billion
Amazon made a big bet on physical stores and business of food when they bought organic grocery chain Whole Foods for $13.7 billion in cash. The deal was finalized in August 2017, valuing Whole Foods at $42 a share.
Whole Foods stores will continue to operate under the same name but as a separate unit of the Amazon. This deal shows Amazon’s growing interest in groceries. They already have their own delivery service, AmazonFresh, and continually testing a ‘click-and-collect’ model that lets users buy groceries online, with an option to pick them up in stores.
8. Walmart Buys Flipkart – $16 billion
On 9th May 2018, Walmart announced its acquisition of Flipkart (India’s largest eCommerce company) for $16 billion for a valuation of more than $20 billion. This is the largest eCommerce acquisition in the world to date.
Walmart has acquired 77% stake in Flipkart, and now they will be competing against Amazon India, who is already ruling the Indian market. In the meantime, Walmart will support Flipkart’s desire of going public, but did not put a date on it.
Flipkart cofounder Binny Bansal, Tiger Global, Tencent Holdings, and Microsoft will retain their stake, while Sachin Bansal (another cofounder) and Softbank will walk away with $1 billion and $4.7 billion, respectively. Moreover, the war between both giants will not only create a huge infrastructure of supply chain but also a large number of jobs.
7. Broadcom Buys CA Technologies for $18.5 Billion
The most unexpected acquisition of 2018 was made by Broadcom, a giant developer and global supplier of a wide range of semiconductor and infrastructure software solutions. They acquired a major IT management software and solution provider, CA technologies for $18.9 billion in cash.
Shareholders of CA received $44.50 per share, representing a 20% premium. This deal clearly indicates that Broadcon is trying to diversify its services to meet the ever-increasing demand for infrastructure software solutions.
6. Facebook Buys WhatsApp – $19 Billion
With a ridiculously high price, Facebook bought more than just an app, in February 2014. Facebook was getting access to more than 450 million users.
It was Whatsapp who killed all mobile messaging services. The idea is to develop a simple, fast and non-bothering service for communication.
Brian Acton and Jan Koum came up with an app where users can share videos and images along with the texts. After the acquisition, Chat app Telegram logs 5 million downloads in one day and Whatspp lost around 1 million of its current user, but in the meantime gained millions of new users also. Today, WhatsApp has more than 1.5 billion users.
5. Hewlett-Packard buys Compaq – $25 Billion
Founded in 1982, Compaq sold computer product and related services. It also produced few first IBM PC compatible computers and during the 90’s they became the largest supplier of the PC system. HP welcomed Compaq into the family for $25 billion on 3rd September 2001 in a bid to compete with IBM. In 2013, HP discontinued the Compaq brand for lower-end systems.
4. Microsoft Buys LinkedIn – $26.2 billion
LinkedIn is a business oriented social network service that has more than 400 million users. On June 13, 2016, Microsoft announced it will acquire LinkedIn for $26.2 billion. Jeff Weiner will remain the CEO of the company and he will report to Microsoft CEO Satya Nadella.
The software giant company Microsoft has taken numerous bold steps in the last couple of years to make its products intelligent and it wants to use data to make them more effective and intelligent. LinkedIn’s wide network offers data that could help in this particular field. LinkedIn shares surged 47 percent after the announcement, while Microsoft’s stock went down to 3.2 percent.
3. IBM buys Red Hat for $34 Billion
In october 2018, IBM announced its plan to acquire Red Hat for $34 billion. Prior to the acquisition, the market cap of Red Hat stood at $20.5 billion. This is by far IBM’s largest deal ever, and the 3rd biggest tech acquisition in the history of the United States.
While this large deal will take time to play out, the combined company will definitely restructure the open source and cloud platforms market in near future. The acquisition could also trigger a new class set of huge mergers between the conventional tech vendors and cloud native, container and DevOps organizations over the next few years.
2. CenturyLink buys Level 3 Communications – $34 Billion
The third-largest telecommunications company in the US, CenturyLink, acquired Level 3 Communications, a multinational telecommunications and internet service provider company, for $34 billion in cash and stock. Level 3 entirely became a part of CenturyLink in November, 2017.
With this deal, CenturyLink is seeking to expand its reach in the business communication market and compete with Verizon and AT&T. The company will now connect over 350 metropolitan areas with more than 100,000 fiber-enabled, on-net building.
Now it will be able to provide a broader and more innovate product portfolio of advanced IT services and network solutions. And because of increased assets, it can continue to invest in broadband infrastructure for small businesses.
1. Dell buys EMC For $67 Billion
The largest tech acquisition took place in 2015, when Dell announced its plan to acquire EMC for a whopping $67 billion or $33.15 a share. This would merge Dell’s enterprise personal computer, server and mobile businesses with EMC’s enterprise storage business.
Dell was looking to move away from the server business and get deeper into the enterprise with private cloud computing and storage where it could compete with HP, IBM and other well-established vendors.
Dell EMC has been putting out new products at roughly the same pace it did before, and things seem to be going great, at least better than what most analyst expected.