Our business model is built on acquisitions. We specialize in acquiring and enhancing software businesses. We help entrepreneurs exit their businesses by providing them with a liquidity event when there are often few other reasonable options. Our management team of former owner-operators builds upon the legacy created with loyal customers and employees, taking businesses to the next level of success.
That’s why we wanted to take a moment in today’s blog post to examine the very topic of mergers and acquisitions. What have been some of the more notable global acquisitions? And finally, which stands out in our home country of Canada? Let’s dig in.
The History of Mergers and Acquisitions
The history of mergers and acquisitions (M&A) is filled with some of the biggest and most impactful business deals of all time. These transactions involve the consolidation of companies, assets, and industries, and can have a major impact on the economy, markets, and even society as a whole. In this article, we will look at some of the biggest M&A deals in history and examine their significance.
One of the largest M&A deals in history was the merger of Exxon and Mobil in 1999. The merger created the world's largest publicly traded oil and gas company, with a market capitalization of over $280 billion. The deal was driven by a desire to increase efficiency and reduce costs, as well as to gain a larger market share. The merger was also driven by a desire to gain access to each other's resources, including oil and natural gas reserves.
Another major merger was the merger of Time Warner and AOL in 2000. The merger created the world's largest media and entertainment company, with a market capitalization of over $350 billion. The deal was driven by a desire to combine the strengths of both companies and create a dominant player in the media and internet industries. The merger was also driven by a desire to gain access to each other's resources, including content, distribution channels, and customers. This is also an example of a merger that did not bear fruit. Where is AOL now?
In 2008, Bank of America acquired Merrill Lynch for $50 billion. The deal was driven by a desire to create a larger and more diversified financial services company. The merger was also driven by a desire to gain access to each other's resources, including customers, products, and technology. The merger was also a way for Bank of America to capitalize on Merrill Lynch's expertise in investment banking and wealth management.
In 2018, AT&T acquired Time Warner for $85 billion. The deal was driven by a desire to create a larger and more diversified media and entertainment company. The merger was also driven by a desire to gain access to each other's resources, including content, distribution channels, and customers. The merger was also a way for AT&T to capitalize on Time Warner's expertise in television, film, and streaming services.
Canada’s Major Mergers and Acquisitions
But what about Canada? Let’s examine some of the biggest examples:
The merger of the Canadian National Railway and Canadian Pacific Railway in 1995, created the largest railway company in Canada.
The acquisition of Canadian telecommunications company Nortel Networks by Ericsson in 2000, was valued at $13.2 billion.|
The merger of Canadian banks Royal Bank of Canada and Bank of Montreal in 1998, created the largest banking institution in Canada with assets of over $230 billion.
The acquisition of Canadian oil and gas company Nexen Inc. by China National Offshore Oil Corporation (CNOOC) in 2012, was valued at $15.1 billion.
The acquisition of Canadian mining company Inmet Mining by First Quantum Minerals in 2013, was valued at $5.1 billion.
The acquisition of Canadian aerospace and defense company Bombardier by Airbus in 2018, was valued at $5.4 billion.
The merger of Canadian mining company Barrick Gold and Randgold Resources in 2018, created the world's largest gold mining company.
The merger of Canadian grocery store chains Loblaw and Shoppers Drug Mart in 2013, created the largest food and pharmacy company in Canada.
These deals illustrate the scale and impact of M&A on the economy and society. Mergers and acquisitions can bring significant benefits, such as increased efficiency, cost savings, and access to new markets and resources. However, they can also have negative effects, such as job losses, reduced competition, and increased concentration of power in certain industries.
M&As are powerful tools for companies to grow and adapt to changing market conditions.
Still, the market cannot be left to go unchecked. Regulators and policymakers must work hard to ensure that these transactions serve the public interest and promote competition and innovation. No one wants to create new monopolies. The biggest M&A deals in history have had a significant impact on the economy and society and will continue to shape the business landscape for years to come. And we're proud to be a part of some of them!