April 11, 2024
10 min read
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According to a survey conducted among M&A professionals, the most important factors to be taken into account for a successful M&A deal include clear value creation for all parties, a well-defined strategy, strong management commitment, and alignment of organizational cultures.
This article explores more factors learned from the experience of the most successful M&A deals.
10 largest and most successful mergers and acquisitions examples
Find below 10 M&A case studies, which include details about the biggest and most successful mergers and acquisitions of the last decade.
| Mergers and acquisitions examples | Deal value | What made the deal successful |
| 1. Disney’s acquisition of Pixar | $7.4 billion | Access to cutting-edge 3D animation technology from Pixar enhanced Disney’s animation capabilities. The deal provided Disney with iconic characters from Pixar, opening up new revenue streams. The merger strengthened Disney’s market position by absorbing a major rival. Disney’s extensive resources, including its large human capital, skilled management team, and substantial financial reserves, facilitated the successful M&A integration of Pixar. |
| 2. Facebook’s acquisition of WhatsApp | $19 billion | WhatsApp’s messaging platform complemented Facebook’s social media platform, offering users an alternative communication channel. WhatsApp had a strong presence in international markets, particularly in regions where Facebook’s presence was lower, allowing Facebook to expand its global reach. Facebook saw potential for revenue generation through future advertising or subscription models on WhatsApp. Facebook enhanced its messaging services with WhatsApp’s technology and expertise. |
| 3. Google’s acquisition of YouTube | $1.65 billion | Back in 2005, YouTube, facing technical challenges and copyright infringement issues, was about to fail. With the deal, it received substantial financial support and expert assistance from Google. YouTube offered Google access to a vast amount of user data, providing valuable insights for targeted advertising and user engagement strategies. YouTube served as a new advertising channel for Google, allowing it to diversify its revenue streams and reach a broader audience through video ads. |
| 4. Microsoft’s acquisition of LinkedIn | $26.2 billion | Microsoft gained access to LinkedIn’s vast professional network, expanding its customer base. LinkedIn provided Microsoft with valuable user data, which enabled personalized products and targeted advertising. LinkedIn’s platform integration with Microsoft’s productivity suite, including Office 365 and Dynamics 365, offered synergies that enhanced users’ productivity and collaboration capabilities. The acquisition diversified Microsoft’s revenue streams with subscription-based services, advertising, and recruitment solutions. |
| 5. Amazon’s acquisition of Whole Foods Market | $13.7 billion | Whole Foods’ network of stores gave Amazon key access points for customer pickup and delivery, which significantly enhanced its reach. Whole Foods’ expertise in groceries complemented Amazon’s efforts to expand its grocery delivery services. Amazon gained customer data from Whole Foods, which helped with personalized marketing and recommendations. Amazon integrated its tech capabilities into Whole Foods’ operations, improving logistics and in-store experiences. |
| 6. Exxon’s merger with Mobil | $1 billion | The deal created the largest publicly traded oil company in the world at the time, with increased production capacity and geographical reach. The merger allowed Exxon to diversify its asset base, including refining and marketing capabilities. The merger resulted in significant cost savings through reduced duplication and optimized supply chains. |
| 7. Walmart’s acquisition of Jet.com | $3.3 billion | Walmart’s acquisition of Jet.com facilitated its entry into the e-commerce market, allowing it to reach a broader customer base. Jet.com’s innovative pricing algorithm and smart shopping features complemented Walmart’s efforts to enhance its online shopping experience. The deal strengthened Walmart’s position against e-commerce giants like Amazon. Jet.com’s fulfillment network and logistics expertise enhanced Walmart’s capabilities in fast and efficient order fulfillment, improving customer satisfaction and delivery times. |
| 8. Johnson & Johnson’s acquisition of Synthes | $21.3 billion | Synthes’ expertise in orthopedic implants and instruments complemented Johnson & Johnson’s existing medical device offerings. Synthes had a strong international presence, particularly in emerging markets, which provided Johnson & Johnson with access to new geographical regions. The deal created opportunities for synergies in research and development, manufacturing, and distribution, leading to cost savings. |
| 9. IBM’s acquisition of Red Hat | $34 billion | The acquisition provided IBM with expertise and capabilities in cloud computing, including hybrid and multi-cloud solutions. The deal expanded IBM’s product portfolio with Red Hat’s industry-leading middleware, containerization technologies, and Kubernetes-based solutions. IBM gained access to Red Hat’s extensive customer base and partner ecosystem, improving IBM’s market presence and competitiveness in key sectors such as enterprise IT, telecommunications, and financial services. |
| 10. Pfizer’s acquisition of Seagen | $43 billion | Pfizer gained access to advanced protein engineering and medicinal chemistry capabilities, which helped with the development of novel combination therapies. The acquisition doubled Pfizer’s pipeline to 60 programs, improving its research and development capabilities in the oncology sector. Pfizer gained access to four FDA-approved cancer drugs, enhancing its portfolio with medications that have already demonstrated commercial success. |
What can you learn from the successful M&A examples?
Let’s take the examples of the largest mergers in history and see what lessons we can learn from them.
1. Focus on complementary capabilities
Amazon’s acquisition of Whole Foods Market exemplifies the importance of focusing on complementary capabilities. By acquiring Whole Foods, Amazon gained access to expertise in groceries and physical retail, complementing its e-commerce and logistics capabilities.
Key takeaway: Prioritize targets with strengths that complement your own. This approach enhances offerings, expands market reach, and creates synergies.
2. Strengthen market position
By acquiring Pixar, Disney strengthened its dominance in the animation industry, gained access to cutting-edge technology, and expanded its portfolio with iconic characters.
Key takeaway: Select companies able to help you dominate specific markets, improve your current products, and offer valuable resources like technology or skilled employees. This will make your company competitive and let you expand your business.
3. Diversify revenue streams
Through the acquisition, Walmart entered the e-commerce market and diversified its revenue beyond traditional retail, enabling it to reach new customers and adapt to changing consumer preferences.
Key takeaway: Target companies operating in complementary sectors or markets, leveraging their expertise and customer base. For example, a company operating in the technology sector can target a software-as-a-service (SaaS) provider.
4. Expand geographic reach
By acquiring Red Hat, IBM gained access to new markets and customer segments, particularly in the cloud computing sector, strengthening its global presence and market competitiveness.
Key takeaway: Target firms that already have a strong presence in the desired regions or markets. By acquiring such companies, you can benefit from their existing infrastructure, distribution networks, and local market knowledge to quickly enter new territories.
5. Enhance customer experience
Facebook’s acquisition of WhatsApp allowed it to improve customer experience by integrating WhatsApp’s user-friendly messaging platform with its existing services. This integration enabled seamless user communication across multiple platforms, enhancing convenience and satisfaction.
Key takeaway: Choose targets with complementary technologies or services that can be seamlessly integrated into your existing offerings.
6. Seek expert advice
In Microsoft’s acquisition of LinkedIn, the company sought guidance from Morgan Stanley, a global leader in financial services. It provided Microsoft with strategic insights and financial analysis, helping the company deal with the complexities of the transaction.
Key takeaway: Seek expert advice from industry professionals, legal advisors, and financial consultants to mitigate risks and maximize the value of the acquisition.
7. Meet regulatory requirements effectively
Google’s acquisition of YouTube faced regulatory scrutiny to ensure compliance with antitrust laws and protect consumer interests. However, due to Google’s proactive approach to addressing potential concerns and cooperating with regulators, the acquisition received an early termination notice and won antitrust approval.
Key takeaway: Seek expert legal advice, conduct thorough due diligence, and proactively engage with regulators.
Key takeaways
- The biggest mergers and acquisitions of all time include Disney and Pixar, Facebook and WhatsApp, Google and YouTube, Microsoft and LinkedIn, Amazon and Whole Foods Market, Exxon and Mobil, Walmart and Jet.com, and Johnson & Johnson and Synthes.
- The key lessons to learn from the largest and most successful M&A deals are prioritizing complementary capabilities, strengthening market position, diversifying revenue streams, expanding geographic reach, enhancing customer experience, seeking expert advice, and meeting regulatory requirements effectively.