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0 pointsperardi4y ago0 comments

Apple has had some decent ones. P.A. Semi, notably. And for $278 million dollars, the ROI on that was ludicrous.

But overall, yes. I can think of so many large-scale acquisitions that didn't go so swimmingly.

  - AOL/Time-Warner
  - Ford/its stable of luxury brands like Jaguar and Land Rover
  - Compaq/HP
  - Daimler/Chrysler

It seems like these “big” mergers tend to now show the synergies people promise. Maybe it’s just too much culture to integrate.

0 comments

mbesto4y ago

Tech M&A guy here.

This is survivorship bias at its finest.

How about Facebook's acquisition of Instagram? Google's acquisition of YouTube? Android? DoubleClick? Amazon's acquisition of Twitch? I could go on.

For the record, yes there are VERY many acquisitions that go wrong, especially when you get to the $B+ value. The parent's characterization seems in line with the "no one ever got fired for using IBM" and that sentiment is grossly unjustified for M&A. There are a bunch of other factors that go into corporate strategy. One example - buying a competitor to eliminate competition and thus protecting future dollars.

sumedh4y ago

> Facebook's acquisition of Instagram? Google's acquisition of YouTube? Android? DoubleClick? Amazon's acquisition of Twitch? I could go on.

These examples are not comparable to what the OP was saying, e.g AOL/Time-Warner, Compaq/HP are mergers of giants with lot of employees.

mbesto4y ago

Ok fine. Here ya go:

BoA/Merrill Lynch

Shell/Royal Dutch

Sanofi/Avantis

Glaxo/SmithKline

P&G/Gillette

Roche/Genetech

Exxon/Mobil

Conoco/Philips

Disney/Fox

AT&T has had so many successful mergers that the government has basically had to split them up every time because it made them into a monopoly.

Should I go on?

EDIT: PS - DoubelClick in 2007 was considered "BIG". It had 1200 employees and was bought for $3.1B. Which was A LOT at the time.

1 more reply

bredren4y ago

Skype’s eventual acquisition by Microsoft is an interesting one.

Can anyone contextualize the horse trading that led to that?

>September 2005, eBay acquired Skype for $2.6 billion.

In September 2009, Silver Lake, Andreessen Horowitz, and the Canada Pension Plan Investment Board announced the acquisition of 65% of Skype for $1.9 billion from eBay.

Microsoft bought Skype in May 2011 for $8.5 billion.

https://en.wikipedia.org/wiki/Skype

tambourine_man4y ago

>Apple has had some decent ones. P.A. Semi, notably

And, let's not forget, NeXT.

Probably one of the best U$400 something million ever spent.

microtherion4y ago

It's funny how there seems to be so little correlation between acquisition prices and eventual value. The PA Semi acquisition was an enormous success at what was at the time a tiny price. NeXT was an enormous success, though $400M at the time was a bet-the-farm price for Apple.

In contrast, while I'm sure Beats has easily paid for itself, $3B was not exactly cheap, and the results were not 10x PA Semi.

tambourine_man4y ago

I remember people being flabbergasted by the price they paid for PA Semi. Dividing the price by the number of engineers seemed indeed ludicrous. And yet, here we are.

1 more reply

mbesto4y ago

I think it's impossible to accurately determine the ROI of an acquisition with incomplete data. There's way too many factors at play.

perardiOP4y ago

I thought about NeXT, but that was a bit of a weird one, because NeXT executives and technology replaced a lot of Apple’s executives and technology. That ended up being a stealth takeover by NeXT.

j / k navigate · click thread line to collapse

0 comments

mbesto4y ago

Tech M&A guy here.

This is survivorship bias at its finest.

How about Facebook's acquisition of Instagram? Google's acquisition of YouTube? Android? DoubleClick? Amazon's acquisition of Twitch? I could go on.

sumedh4y ago

> Facebook's acquisition of Instagram? Google's acquisition of YouTube? Android? DoubleClick? Amazon's acquisition of Twitch? I could go on.

These examples are not comparable to what the OP was saying, e.g AOL/Time-Warner, Compaq/HP are mergers of giants with lot of employees.

mbesto4y ago

Ok fine. Here ya go:

BoA/Merrill Lynch

Shell/Royal Dutch

Sanofi/Avantis

Glaxo/SmithKline

P&G/Gillette

Roche/Genetech

Exxon/Mobil

Conoco/Philips

Disney/Fox

AT&T has had so many successful mergers that the government has basically had to split them up every time because it made them into a monopoly.

Should I go on?

EDIT: PS - DoubelClick in 2007 was considered "BIG". It had 1200 employees and was bought for $3.1B. Which was A LOT at the time.

1 more reply

bredren4y ago

Skype’s eventual acquisition by Microsoft is an interesting one.

Can anyone contextualize the horse trading that led to that?

>September 2005, eBay acquired Skype for $2.6 billion.

In September 2009, Silver Lake, Andreessen Horowitz, and the Canada Pension Plan Investment Board announced the acquisition of 65% of Skype for $1.9 billion from eBay.

Microsoft bought Skype in May 2011 for $8.5 billion.

https://en.wikipedia.org/wiki/Skype

tambourine_man4y ago

>Apple has had some decent ones. P.A. Semi, notably

And, let's not forget, NeXT.

Probably one of the best U$400 something million ever spent.

microtherion4y ago

In contrast, while I'm sure Beats has easily paid for itself, $3B was not exactly cheap, and the results were not 10x PA Semi.

tambourine_man4y ago

I remember people being flabbergasted by the price they paid for PA Semi. Dividing the price by the number of engineers seemed indeed ludicrous. And yet, here we are.

1 more reply

mbesto4y ago

I think it's impossible to accurately determine the ROI of an acquisition with incomplete data. There's way too many factors at play.

perardiOP4y ago

j / k navigate · click thread line to collapse