Call it precognition or psychic powers, some giant technology companies can possibly predict the future of either a startup or established companies. Why else will they invest billion of dollars to acquire them? These grand deals are hatched despite the global economic crises and the seemingly declining price of petrol. These giant technology companies must be commended for their ability to perceive the future viability of a start up and actually pour money into them. Of course, they invest based on numbers and not on sentiments. Recently, Opera mini was offered 1.2 billion dollars by Qihoo, a Chinese software company. Often times payment are made mostly in stock.
It must be added that some of this acquisition do not pan out as planned. A good example of this is the acquisition of Time Warner by AOL for $162 billion.
Today, the merger has collapsed and AOL is now owned by Verizon which bought it for $4.4 billion dollars.
The AOL and time warner merger was described as a the biggest mistake in corporate history by Jeff Bewkes, the CEO of Time Warner. It is not Uhuru always, some of these acquisitions can go sour.
Nevertheless, here are some of the 5 biggest acquisitions in the tech industry.
Dell Inc. buys EMC corporation for $67 billion in 2015
EMC is a company that helps tech companies build virtual Softwares. So, it is not surprising that Dell Inc. which is one of the biggest manufacturers of personal computers purchased the company.The new deal is expected to be sealed in the middle of 2016. The precise value will depend on the value of a “special stock” included in the deal that tracks the share price in virtual software provider VMWare Inc, which is owned by EMC.
Facebook buys WhatsApp for $22 billion in 2014
Before the acquisition of WhatsApp by Facebook, the free instant messaging service created in 2009 grew faster than Facebook in its first five years and now it has more than 450 million monthly users around the globe according to Dailymail.co.uk. The takeover was the biggest venture capital-backed company. Facebook married a beautiful bride in 2014 but had to part with 22 billion dollars. The take-over made the then owners of WhatsApp-Jan Koum and Brian Acton billionaires overnight. Today, over 19 billion messages are sent daily with over 1 million new users. Good investment for Facebook.
Hewlett-Packard buys Compaq for $18.6 billion in 2002
Sometimes offering to buy your competitor is not always about mocking them or showing off the fact that you are financially buoyant. The carrot dangled at Compaq was irresistible that they accepted to be bought over by Hewlett-Packard for $18.6 billion. The deal was delayed after Walter Hewlett, a board member of HP Co. and eldest son of William Hewlett, the co.founder of HP, initially tried to block the deal from happening because he was against it, but it was finally endorsed by shareholders.
HP buys EDS for $13.9 billion in 2008
Six years after completing the Compaq deal, HP was in the news again as it purchased the Information Technology company-Electronic Data Systems (EDS) in a deal worth $13.6 billion. This purchase has boost HP’s status as a serious rival to IBM in the IT industry.
Symantec buys Veritas for $13.5B in 2005
Symantec, an online security company snapped up Veritas which is a storage firm for $13.5 billion dollars. The merger was expected to create a company with greater financial scale and resources. Unfortunately, this did not work out as planned as Veritas will be sold to Carlyle Group LP for 7.4 billion dollars soon.
