20653023 Entry # 2

More About M&A

Last class we talked about M&A (merger and acquisition) strategy. According to The Jordan Edmiston Group Inc., the number of deals through 2007 is 838 across 11 industry sectors with a total value almost $109 billion. Do the math and that is $130 million per deal. Quite impressive, isn't it?

So, JEGI provides us with data that online media and marketing services deals led the way with 555 recorded transactions with value $43 billion (Google, Microsoft, Yahoo and AOL)

There are some of those transactions:

Yahoo! Acquires Zimbra for $350 million
Yahoo! Acquires Rivals.com for $100 million
Yahoo! Acquires Blue Lithium for $300 million
Yahoo! Acquires Right Media for $750 million

Google Acquires Postini for $625 million
Google Acquires Grand Central for $45 million
Google Acquires Feedburner for $100 million
Google Acquires Doubleclick for $3.1 billion

Nokia Acquires Twango for $96.8 million
Nokia Acquires Enpocket
Nokia Acquires Navteq for $8.1 billion

Microsoft Acquires Medstory
Microsoft Acquires TellMe for $800 million
Microsoft Acquires aQuantive for $6 billion

eBay Acquires Stubhub for $310 million
eBay Acquires Stumble Upon for $75 million

AOL Acquires Third Screen Media
AOL Acquires Tacoda for $275 million

Cisco Buys Webex for $3.2 billion
Answers.com Acquires Lexico for $100 million
News Corp. Acquires Dow Jones for $5 billion
MySpace Acquires Photobucket for $250 million
R.H. Donnelly Acquires Business.com for $345 million

So, why make acquisitions?

One of the answers is "growth". It was observerd that M&A provides with more rapid growth rather than organic.

Besides, there are more several reasons for M&A such as:
1. To acquire new capabilities or add to existing one
2. To establish a business model
3. To lower cost
4. To improve market position

To succeed in M&A The Boston Consulting Group suggests to take followed steps:
1.Thoroughly test the upside potential of the acquisition based on original recent research
2.Access the internal impact of the deal
3.Quantify the cost of inaction
4.Carry out pre-M&A exercises
5.Establish opening and closing bids in advance.

References:
http://seekingalpha.com/article/58714-the-top-m-a-deals-of-2007
http://www.growingbusiness.co.uk/06959143454024511016/mergers-and-acquisitions.html
Successful M&A: the method in the madness by BCG

2 entry by 20653023