Global mergers and acquisitions in early 2017 netted almost $1.3 trillion in announced deal value, despite sweeping market changes in Europe and post-election political uncertainty in the U.S.
Join us as we explore the most interesting mergers and acquisitions of the second half of 2017, and the impact they will have on the thriving technological scene in 2018.
Consolidation Wherever and Whenever Possible
A series of large and interesting tech M&As took place, with both volumes and values surpassing those recorded a year before.
Intel bought Mobileye for $15 billion, Samsung acquired Harman International Industries for $8 billion, and the Hewlett Packard Enterprise purchased Nimble Storage for $1 billion in cash, among other unexpected deals that left us scratching our heads.
Midway throughout the year, experts predicted that the market would hold steady for the rest of 2017 – they were partly right and partly very wrong. As the year unfolded, Western-based companies’ trust in the transnational economic climate seemed to grow, with increased innovation and deal activity leading to an upward trend that lasted until the end of Q4.Experts were partly right, and partly very wrong, about M&As in 2017. Click To Tweet
With startups increasingly choosing M&As over going public, and large enterprises’ penchant for both horizontal and vertical expansion, Q3 and Q4 proved to be an exciting time for many firms big and small. Huge and unexpected deals took place, along with countless smaller ones, with final dollar amounts well above pundits’ estimates.
Ambitions Running High at Google
It was an eventful, action-packed time for the executives at Google. The internet data giant acquired several international startups, some as young as four months. Halli Labs based in Bengaluru, India had just started its operations when Google made the offer. The tiny company builds deep machine learning systems to address what they call “old tech problems,” which will now be part of Google’s offerings.
Google also bought AIMatter, a startup focused on computer vision and artificial intelligence. Founded in Belarus, AIMatter has offices in Minsk, the Bay Area and Zurich. Its neural network-based AI platform and SDK are now part of the large Google product family.2017 was an eventful, action-packed year for executives at Google. Click To Tweet
If you’re thinking Google probably didn’t stop there, you’re right. It also acquired a team of engineers from HTC, the Taiwanese smartphone company, for $1.1 billion. The HTC team acquisition is actually Google’s sixth largest deal ever, right after Waze (2013), YouTube (2006) and DoubleClick (2007).
Microsoft is Bolstering its Multi-Platform Approach
Israeli startup Cloudyn helps companies that use multi-platform clouds to manage their billing. Therefore, acquiring the Cloudyn fit perfectly with Microsoft’s multi-platform services strategy.
Microsoft bought Cloudyn for between $50-70 million, though the final amount wasn’t disclosed by either party.
Dell, Cisco, Subsidiaries and Startups
VMware, a subsidiary of Dell Technologies, purchased VeloCloud, a startup that focuses on cloud-based wide area networks (WAN) that include data centers or regions. VMware offers cloud computing and platform virtualization software and services. The acquisition expands VMware’s portfolio to put the company in competition with tech giant Cisco.
VMware now counts VeloCloud’s prestigious customers as its own, including AT&T, Deutsche Telekom Mitel, Sprint, TelePacific, Telstra and Vonage, among others.
Changes in the Payment Services Industry
The Georgia-based payments service provider TSYS acquired Cayan, a Massachusetts-based payment technology innovator, for $1 billion in cash. Cayan employs 430 people, with about 230 employees in Boston, 135 in Belfast, Northern Ireland, and a small gift card unit in Scottsdale, Arizona.
Why the acquisition? Because now TYSY can position itself as a leading payment services provider to small and medium-sized businesses, offering a much broader set of value-added products and services.
Competition Snowballing into 2018
Thanks to the US presidential elections, UK-EU Brexit negotiations and a fragile economy in Southern Europe, 2017 started off with an intense focus on politics and its potential impact on markets. As the year ended, it became clear that once again the markets did what they do best: act rationally and rise.
With less political uncertainty and more economic confidence, a whopping 70% of executives at US-headquartered international corporations and 76% of executives at America-only private equity firms now predict an increase in the number of deals and their size in the year ahead. Such figures tend to be a positive influence on the economy as a whole.
We expect tech competition to continue to increase in 2018, with strong deal activity and innovation pushing the boundaries of experience and predictions.
To see how else enterprises are gearing up for increased competition in 2018, read The New Chiefs of Disruption: What Is A Chief Disruption Officer?