Top 10 Business Mergers/Acquisitions of the Decade (Part 1)

Posted on 03. Jan, 2010 by Broadband in Business, Finance & Investments

2000-2009 saw some of the biggest mergers and acquisitions in history with all fields and industry bigwigs vying for one another in an attempt at global domination.

It was a telling decade however as some mergers that sounded amazing on paper , consequently became a poor business decision costing millions and billions of perceived profit for both companies involved.

Pbleepd takes a look at the Top 10 mergers and acquisitions in a decade of up and down results

AMERICA ONLINE Inc (AOL) AND TIME WARNER

The beginning of the decade saw one of the biggest deals (on paper) ever between AOL and Time Warner. AOL, the dial-up provider that introduced America to the world wide web, announced its takeover of Time Warner in a $164billion deal. In the “deal of the millennium” AOL Time Warner aimed to become the world’s largest media company combining AOL’s online services with Time Warner’s vast media and cable assets.

“The dreams of Steve Case and Jerry Levin, AOL and Time Warner’s chief executives at the time however fell apart not just with the bursting of the dotcom bubble in internet valuations. “The deal was ultimately undone by flaws in its premise and holes in AOL’s business model. AOL’s lock on providing internet services in the dial-up world disappeared in the new world of broadband connections”. – Financial Times

Indeed problems arose from petty culture clashes, which saw Time Warner employees resist adopting AOL e-mail addresses, to the fact that Time Warner had simply overvalued the AOL stock it sold out for.

AOL may have jumped the gun too early and should have taken notes from COMCAST’s books who later in the decade acquired a range of smaller deals with Microsoft, MGM and AT&T Broadband.

PFIZER INC AND PHARMACIA CORPORATION

Just as we thought the start of the millennium saw it’s biggest deal in the pharmaceutical industry between Glaxo Wellcome PLC & Smith Kline Beecham PLC (GlaxoSmithKline), we were to be taken aback by what turned out to be an even bigger and better merger.

In 2003 Pfizer officially announced the acquirement of Pharmacia Corporation for $55 billion in an imporved attempt to expand it’s product base and develop new medicines. Together they forged one of the world’s fastest growing and most valuable companies. Today Pfizer is now the world’s leading research-based pharmaceutical company.

“On any given day, we estimate that nearly 40 million people around the world are treated with a Pfizer medicine. Our new company is the global leader in discovering, developing and delivering innovative medicines and health care solutions essential to improving global public health and addressing unmet medical needs.” - Pfizer Chairman and Chief Executive Officer Hank McKinnell

ROYAL DUCTH PETROLEUM CORP. AND SHELL TRANSPORT AND TRADING CO

For 100 years Shell had dual ownership with the firm being 60% owned by Royal Dutch Petroleum and 40% owned by Shell Transport & Trading. This was up until the middle of the decade when both companies merged into Royal Dutch Shell.

The company had called on investors to usher in an era of “one company, one board and one chief executive.” After the merger took place Shell found profits rising and became one of the six supermajors (vertically integrated private sector oil exploration, natural gas, and petroleum product marketing companies) along with Chevron and ExxonMobil who themselves were subject of a supermerger.

Shell now operates in 140 countries, is on the FTSE 100 and in 2009 was listed as the world’s largest corporation for 2009 by Fortune and world’s second largest corporation by Forbes worth around $500billion

CHASE MANHATTAN AND JP MORGAN

“The end of 2000 saw a rise in financial services mergers as the industry took advantage of the dismantling of the Depression-era Glass-Steagall laws a year earlier that had kept banking, insurance, and securities businesses separate” - Financial Times

Introducing the merger of Chase Manhattan and JP Morgan in December of that year. With Chase Manhattan’s acquisition of JP Morgan, the newly formed JP Morgan Chase partly owned by John D Rockerfeller serves millions of consumers in the United States and many of the world’s most prominent corporate, institutional and governmental clients

It is a leader in financial services with assets of $2 trillion, and the largest market capitalization as well as the second largest U.S Hedge fund. The JPMorgan brand is used by the Investment Bank as well as the Asset Management, Private Banking, Private Wealth Management, and Treasury & Securities Services divisions.

Fiduciary activity within Private Banking and Private Wealth Management is done under the aegis of JPMorgan Chase Bank, N.A, the actual trustee. After acquiring Bank One, Chase became the largest credit card issuer in the US, also tying deals with Canada.

INBEV Inc AND ANHEUSER-BUSCH COMPANIES Inc

Some were sceptical with the alliance of Superbrands merging but when the profit prospects were made clear, Inbev’s $52billion dollar acquisition of Anheuser-Busch was inevitable. The deal officially made the company the world’s largest brewer, uniting the maker of Budweiser and Michelob with the producer of Stella Artois, Bass and Brahma. Together, the two companies will have sales of more than $36 billion a year, surpassing the current No. 1 brewer, SABMiller of London.

The combined company was named Anheuser-Busch InBev (or ABI), fulfilling a promise by the Belgian company to include the Anheuser name in the new brewer’s title. With a 25% global market share ABI employs 120,000 in over 30 countries. The growth has been one for all entrepreneurs to admire with Interbew buying South-American firm Ambev only four years earlier to form Inbev. Another sign of a European vying for maximum profit.

PART 2 HERE

Source
http://www.ft.com/cms/s/0/ffe1a378-f419-11de-ac55-00144feab49a.html
http://www.pfizer.com/about/history/pfizer_pharmacia.jsp
http://www.ft.com/cms/s/0/44d9dda4-f313-11de-a888-00144feab49a.html?catid=2&SID=google

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