THE TEC GIANTS’ M & A STRATEGIES. DO YOU KNOW WHO’S CURRENTLY BUYING?

 

Microsoft replaced Yahoo as king of mergers and acquisitions in 2015 according to data released by CB Insights.

They compared the number of companies bought by the ‘big eight’ – Amazon, Apple, Facebook, Google, Microsoft, Salesforce, Twitter and Yahoo.

The results are interesting.

Back in 2013 and 2014, Yahoo was king as it was busy buying with 29 acquisitions in 2013 and 19 acquisitions in 2014. In 2015, it only bought 1 business [Polyvore].

A significant factor in terms of the change of fortunes relates to Yahoo’s CEO, Marissa Mayer. At the beginning, she was given the benefit of the doubt but currently the business is struggling.

Google made fewer than half the acquisitions it made the year before with 16 in 2015 compared to 35 in 2014. However it still had the second highest number of deals made in 2015 and it has made the most acquisitions of all the tech giants over the past five years.

Both Amazon and Salesforce saw small increases in their number of acquisitions in 2015. Amazon increased its purchases from 5 to 7 and Salesforce went from 1 to 5 acquisitions.

Facebook also cut back on deals over the past three years going from 10 to 8 to 5. However it did make the largest dollar acquisition of the group to date when it purchased WhatsApp in 2014 for $22 billion.

So most of the heavyweights in tech pulled back from mergers and acquisitions in 2015 with one striking exception – Microsoft.

It seems Microsoft is where Yahoo was a couple of years ago. Satya Nadella took over from Steve Balmer in 2014 and is still riding that tailwind.

It made 18 acquisitions in 2015, up from 10 in 2014.

Microsoft has opted for a different strategy compared to its older acquisitions. In most cases, they are allowing the businesses they acquire to retain their culture and original teams plus their existing premises instead of trying to assimilate them completely.

Furthermore, Microsoft doesn’t seem to be slowing down this year as they have already made 5 acquisitions this year.

In a previous blog post titled ‘$250 million reasons why you need to sell to a strategic buyer’ [5th February], I wrote about their $250 million purchase of a British app developer, Swiftkey.

The remarkable point was the business they purchased had sales of $13 million with losses of $8 million yet Microsoft ‘had their own reasons’ for buying it.

We will see in the coming months whether Microsoft continues to be the king of acquisitions or whether any of the other tec giants change their strategy.

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