8 August 2022

Historical excursion into mergers and acquisitions of last decade 2nd part

The first chapter of this article examined the most effective and failed M&A transactions during the first half of the previous decade (link on the first part). Following the financial crisis of 2008, several exciting deals happened. Some utterly flopped, while others were recorded in the annals of the most significant mergers and acquisitions. These cases can teach crucial insights to guide us through the M&A market.

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Every M&A deal is influenced by a wide range of diverse circumstances, objects, and occurrences. The pandemic caused by COVID-19 was not an exception. Read on to discover how M&A deals developed over the latter part of the 2010s.


Two months before the end of 2016, AT&T announced the acquisition of one of the world's largest media and entertainment companies, Time Warner. The company owns the Warner Bros. line of businesses in addition to a number of well-known brands like TNT, TBS, CNN, and HBO. With the $85 billion agreement, AT&T can now market Time Warner's enormous library of content to customers and rival cable providers. To compete with tech giants like Google and Facebook, which dominate the internet ad market, AT&T aims to collect usage data on its viewers. Nevertheless, according to New York Times, the Justice Department would sue AT&T two years later over the merger with Time Warner, claiming it would harm customers who would probably see an increase in their monthly cable rates.

At the same time, the second-largest M&A transaction in the history of the Czech Republic occurred. For $7.8 billion, Asahi Group, the world's 12th-greatest brewer, acquired five Eastern European beer brands from Anheuser-Busch InBev, including Czech Pilsner Urquell. According to Financier Worldwide, there was fierce competition around the transaction. Asahi ultimately prevailed against Bain Capital, Jacobs Holding AG of Switzerland, and PPF Group to gain control of the brands. Asahi had previously said it had set aside between $3 billion and $4 billion for foreign acquisitions but was compelled to change this estimate due to growing competition.

The biggest failed deal of the year would have created one of the largest U.S. companies with almost $100 billion in annual sales. However, U.S. industrial conglomerate United Technologies rejected a $90.7 billion offer by rival aerospace supplier Honeywell International. According to Reuters, the reason was that pursuing the merger would be "irresponsible" toward United Technologies' shareholders.


Disney's acquisition of 21st Century Fox was the year's most lucrative transaction. One of the most extensive media acquisitions ever, the $71.3 billion deal comprises a vast array of assets, including a movie studio, TV shows, TV networks, and even a controlling stake in the TV streaming service Hulu. According to Reuters, the deal enables Disney to compete with rapidly expanding online rivals like Netflix and Amazon Prime. The agreement also covers twenty-two of Fox's regional sports networks. They will be able to broadcast live games of U.S. professional baseball, basketball, and hockey clubs from the United States, as well as the top college and high school games.

The most significant transaction of the year in the Czech Republic was made between PKN ORLEN and Unipetrol. According to MergerMarket, the Polish oil refiner and petrol retailer have agreed to acquire a 37% stake in Unipetrol for $3 billion. Before it in 2005, ORLEN acquired a 63% stake in Česká rafinerská, that later was transformed into Unipetrol.

In an attempt to establish a global consumer products conglomerate, American food producer Kraft Heinz suddenly revealed a $143 billion offer for British Unilever at the beginning of the year. Two days later, Kraft Heinz withdrew the bid, which would have been one of the biggest corporate takeovers in history. Financial Times reports that it was challenging for the U.S. company to arrange an agreement that would have been acceptable to both parties due to the early disclosure of Kraft's interest in Unilever. Warren Buffet and Jorge Paulo Lemann, Kraft Heinz's two largest shareholders, consequently agreed to abandon the offer after concluding that an extended public pursuit to acquire Unilever would have done more harm than good.


The year started with the announcement of the merger between T-Mobile U.S. and Sprint Corporation. As stated by Reuters, after a two-year regulatory process, when a group of states claimed the merger would violate antitrust laws and result in higher pricing, the $26 billion deal was successfully finalized. Nevertheless, during the two-week trial, T-Mobile and Sprint claimed that the merger would better position the new company to compete with industry leaders like Verizon and AT&T. The combined firms plan to provide a more productive business with affordable rates and quicker internet connections, becoming the third-largest U.S. cellphone carrier.

The acquisition of Liberty Global by Vodafone made the year 2018 stand out among the best mergers and acquisitions in Czech history. According to the terms of the contract, Vodafone would purchase Unitymedia in Germany as well as UPC Czech, UPC Hungary, and UPC Romania. According to the MergerMarket, the deal value was approx. $19 billion and was expected to significantly alter the Czech Internet industry. While UPC primarily offered cable broadband and television services, the Vodafone Czech division mainly engaged in the mobile market. UPC served over 600,000 individuals in the Czech Republic through cable TV and the internet.

One of the most failed deals of the year was between Broadcom and Qualcomm. Singapore-based manufacturer and global supplier of semiconductor and infrastructure software products, Broadcom, was planning to acquire American Qualcomm, which is famous due to owning patents critical to the 5G and 4G mobile communications standards. According to Reuters, the deal was valued at $117 billion and was blocked by U.S. President Donald Trump, who was referring to national security concerns.

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In the summer of 2019, the year's best deal was announced. Due to the merger of equals between the aerospace divisions of United Technologies Corporation and the Raytheon company, substantial American aerospace and defense conglomerate was formed. The $121 billion merger resulted in the creation of the second-largest defense contractor in the world. The Guardian claimed that the new company, known as Raytheon Technologies, would produce Tomahawk missiles, the F-35 fighter jet engine, and space suits for astronauts, among other things, and will generate revenues of roughly $74 billion in 2019. After Boeing and Lockheed Martin, the second-largest defense contractor will be Raytheon Technologies.

The acquisition of Innogy by E.ON received approval from the European Commission in the autumn of 2019. As a result of their combined control over 44% of the Czech gas market and less than 25% of the nation's energy supply, these enterprises' deal was significant for the country. As claimed by E15.cz, with 1.5 million gas consumers and the equivalent number of electricity customers, the $44 billion acquisition will form the utilities giant.

In 2019, the tobacco leader Philipp Morris International started negotiations with its rival Altria over a $200 billion deal. A deal's justification rested primarily on Juul and IQOS' capacity to control the largest vaping marketplaces worldwide. However, the merger of equals was abandoned after a U.S. regulatory crackdown on e-cigarettes threatened Juul, the vaping company in which Altria held a 35% stake. It is important to note that Philip Morris' IQOS, a competing non-smoking device that heats tobacco without burning it, has received approval from the American Food and Drug Administration. According to Reuters, Philipp Morris reportedly withdrew from the negotiations because of the rising concerns around Juul, which is coming under close inspection in its home market as teen e-cigarette usage intensifies. Companies declared they would concentrate on the joint launch of IQOS in the U.S. after the announcement of the closure of merger negotiations.


After Kraft Heinz's unsuccessful $143 billion acquisition attempt of Unilever in 2017, Unilever decided to acquire its Dutch-listed Unilever NV and terminate its 90-year dual-headed structure in favor of a single London-based entity. The deal was valued at $81 billion. According to Reuters, the Anglo-Dutch consumer products giant reportedly complained that the dual system limits its ability to complete acquisitions and asset sales rapidly. This flexibility depends on Unilever's desire to realign its portfolio in industries with more robust growth rates, such as premium cosmetics.

One of the biggest M&A deals this year in the Czech Republic was between AXA and UNIQA. According to the MergerMarket, the transaction cost was $1 billion. The merger will result in the demise of AXA životní pojišťovna a.s., AXA pojišťovna a.s., UNIQA pojišťovna a.s., UNIQA poisťovňa, a.s., and the creation of UNIQA pojišťovna a.s. as their successor company. As claimed by Banky.cz, the Austrian insurer will gain over 5 million AXA clients in the Czech Republic, Poland, and Slovakia combined. Eight hundred million euros in yearly insurance premiums are also included. Thus, UNIQA will have a 9% non-life insurance stake and a 5% life insurance share. With an overall share of 8%, it will rise to the fifth spot in the list of insurance providers in the Czech Republic. Afterward, the firm will acquire a 10% market share in pension insurance.

AstraZeneca consistently rejected Pfizer's $118 billion takeover attempt in 2014. However, the tables have turned, and AstraZeneca is allegedly on the offense and targeting a deal of equivalent size. As reported by Reuters, the British pharmaceutical giant has discussed a merger with Gilead Sciences, an American rival. AstraZeneca planned to form the largest pharmaceutical company in the world in terms of market value, which was valued at $232 billion. The deal would have brought together two pharmaceutical companies leading the battle against the coronavirus. Still, it was politically delicate given how eagerly governments seek control over vaccinations and treatments. According to Bloomberg, Gilead's medication Remdesivir has been approved for use in emergency situations in numerous countries and has demonstrated improvement in COVID-19 patients in clinical studies. It was not interested in joining up with another major pharmaceutical company. Political resistance from the U.S. and U.K. governments also contributed to the deal's failure, notably in light of the ongoing coronavirus pandemic.


One of the year's significant acquisitions was disclosed in the spring of 2021. AT&T's Warner Media merged with Discovery, Inc. As stated by AT&T on its official website, the deal will result in creating a premier, standalone global entertainment company. According to CNBC, the transaction value was $43 billion. The arrangement enables AT&T to concentrate its capital expenditures on expanding its cellular network to compete with Netflix, Disney, and other streaming services. The deal may also boost AT&T in paying down some of its substantial debt. It had a net debt to adjusted EBITDA ratio of around 3.22 times as of the end of the fourth quarter, with a total of $156.2 billion in net debt.

In the same year, the third-largest M&A deal in the history of the Czech Republic happened. In August 2021, the American software company, NortonLifeLock, proposed to acquire Czech multinational software rival Avast. According to Reuters, the transaction was valued at $8.6 billion and would combine NortonLifeLock's expertise in preventing identity theft with Avast's privacy solutions. The deal will create a leading company in consumer security software, serving more than five hundred million customers.

The biggest failed deal of the year was between Unilever and GlaxoSmithKline. According to The Times, Unilever made a $68 billion offer for Glaxo's home goods company, but the board of Glaxo and Pfizer, which holds a 32% stake in the company, rejected the offer as being too low. After that, Unilever abandoned its bid saying, "Unilever is committed to maintaining the strict financial discipline to ensure that acquisitions create valued for our shareholders," reported The Times.


Generally, it is impossible to say which of the above-mentioned transactions was the most profitable or ultimately failed. Some companies turn down offers so they may earn more on their own, as it was in the case with AstraZeneca and Gilead. However, firms may also recognize that they need more time to find better opportunities, as was the case with United Technologies and its transactions. The aerospace giant combined with Raytheon company in 2019 for a $121 billion transaction; in contrast, Honeywell attempted to buy United Technologies for $90 billion in 2016. If United Technologies had chosen to be purchased back then, the better deal with Raytheon probably would not have emerged. However, not every transaction is as successful as it might seem. It was like that in the case of the potential merger between Philipp Morris and Altria. Philipp Morris dropped its $200 billion offer to purchase Altria after realizing the legal difficulties involved. The businesses continued to work together on a product for Philip Morris that was more secure than Altria's.

The transaction's viability may be affected not just by legal concerns but also by global crises like the Coronavirus pandemic. For instance, it played a role in the history largest merger between two pharmaceutical giants failing. American Gilead Sciences was up for acquisition by AstraZeneca. Nevertheless, Gilead declined the $232 billion offer, claiming they already had their own "weapon" against COVID-19 and did not need to combine it with another pharmaceutical business. Since both governments were opposed to the merger, it goes without saying that Gilead's desire was not the sole factor in the decision to reject the deal.

Surprisingly, diverse company cultures are the last but certainly not least factor that may impact the deal. For $143 billion, Kraft Heinz attempted to buy Unilever in 2017. Two businesses with utterly dissimilar corporate cultures would have been combined through a merger. Kraft Heinz, which was recently established through debt-ridden acquisitions and had a stable of slower-growing brands, is mainly focused on the U.S. With the help of 3G's management style, it adopts aggressive cost-cutting measures to increase company's margins and, in turn, pay off the debt and boost shareholder returns. Unilever is better renowned for its powerful brands and presence in some of the largest growing economies.