The United States continues to be the biggest market for mergers and acquisitions, representing more than one-third of the global M&A market and totaling more than $1 trillion on an annual basis since nine of the last 13 years. Globally, the M&A market has continually topped $1 trillion every year in the 21st century, suggesting that the international economy is only getting bigger.
While mergers and acquisitions happen all over the world, the business community concentrates primarily on what happens within the confines of the U.S. This makes sense, considering how big some companies are and how gigantic these mergers can become.
The year isn’t even at the halfway mark, but there have been plenty of monster M&As – and we can expect more to come. Here are eight recent mergers and acquisitions you should beware of:
To kick off 2019, Newmont Mining purchased Goldcorp, a metals mining company that had a positive cash flow, plenty of projects in the black, and very little debt. When Newmont absorbed Goldcorp, it formed one of the largest mining companies in the world in a deal valued at $10 billion.
In its latest earnings call, the Newmont-Goldcorp merger beat estimates and quarterly expectations. The only issue that profit levels were affected by higher transaction costs.
2. 21st Century Fox
In March, The Walt Disney Company finally completed its two-year-long acquisition of 21st Century Fox. Under the immense deal, Disney has full control over a gigantic film and television library, several major Marvel characters, a huge stake in foreign television, and a third ownership of Hulu.
3. Pandora Radio
Although the deal began in 2018, Sirius XM Holdings finally completed its acquisition of Pandora Media for $3.5 billion. This now makes it “the world’s largest audio entertainment company.” The purpose of the move is to “drive long term growth and value for its stockholders by employing the disciplined and focused approach that has always been an integral part of Sirius XM.”
Wait a minute…Sunrise Records is still around? One more minute…people still visit HMV stores? They apparently do, and now the two retail brands are integrating.
Sunrise, a Canadian music store chain, purchased HMV, a British retailer in a move that will save 100 stores and more than 1,500 jobs in Britain and Canada. The brains behind the deal say consumers like to own physical, which is why they will visit these stores to purchase CDs, DVDs, and even vinyl records.
5. Costa Coffee
Coca-Cola is making a big push in the coffee market – and that’s only a good thing for java lovers.
The soda maker completed its acquisition of Costa Coffee, British-based coffee brand, for just under $5 billion. This is part of the company’s wider plans to expand beyond just soda – it is also making a play for milk. But don’t expect to find it in the United States anytime soon because Coca-Cola initially wants to concentrate on accessing European, Asian, and African markets.
Barrick Gold wanted to buy Newmont for $18 billion in a hostile takeover. Barrick ostensibly believes that gold is getting harder to find, so it wants to boost its presence throughout the globe. The result? Newmont rejected the deal, but it submitted a counter offer: a joint venture. It is unclear how it will proceed moving forward, but anything goes at this point.
It was all but certain that Deutschebank and Commerzbank would merge, but then the deal fell through. Both of these troubled German banks seemed like a perfect fit. Out of nowhere, the nation’s two largest financial institutions confirmed that they have abandoned any potential merger. The move even had the backing of Berlin.
“Germany’s globally active companies need competitive financial institutions that can support them around the world,” Olaf Scholz, the German finance minister.
Last year, T-Mobile and Sprint agreed to merger and establish a $146 billion company under the T-Mobile brand, combining the third- and fourth-largest mobile carriers in the U.S. But the deal has not been given the OK from the Department of Justice (DOJ) and the Federal Communications Commission (FCC). Once these federal agencies sign-off on the proposal, then the merger would finally be completed after deliberations and negotiations for about two to three years.
Mergers and acquisitions of well-known brand and corporate behemoths are coming under greater scrutiny, with government officials and the public concerned about consolidation of power and pending monopolies. There are often many business lawyers involved to ensure the mergers and acquisitions take place successfully without any legal repercussions.
Could many of these proposed deals happen in the background? Well, only if they are able to persuade their respective governments. But the future of $100 billion companies merging together could be suspended, though M&A activity could still be prevalent among small- and medium-cap firms.