2020 has been a challenging year. Throughout these tough times, keeping businesses and employees safe has been one of the key priorities for corporations. However, several companies showed resilience during this turbulent time on global economy record and were able to take strategic decisions to grow and expand their businesses via acquisitions.
Below we look into some of the Mega-Mergers that took place in 2020 that are likely to have a significant impact on their respective industries in the year to come.
- AON acquires Willis Towers Watson for US$ 30 billion
2020 can be defined by the term “black swan event” by risk assessors in the future. But the year will also be notable for a different reason: the insurance industry’s largest acquisition ever – US$30 billion of Willis Towers Watson by AON. The combination is to be confirmed in the first quarter of 2021. This will be a time where the insurance industry will face a number of new threats emerging from the coronavirus pandemic, climate change and cybersecurity. Nevertheless, the all-stock deal makes AON the largest insurance broker in the world post this merger.
- Analog Devices acquires Maxim Integrated for US$ 21 billion
Analog Devices is not one of those companies that people are very acquainted with, however, it is definitely one of those that people have come across on a regular basis. Known as the world’s largest manufacturers of semiconductors, Analog Devices manufactures the electronics and chips that are used in known products in the consumer, healthcare, automotive and industrial industries. This deal is expected to yield synergies close to US $ 300 million, strengthening Analog Devices position as the number one in its respective industry.
- Seven and I acquires Speedway gas stations for US$ 21 billion
The year 2020 has seen most people ‘working from home’, and this in turn has reduced the need for transportation. The idea of two gas station giants merging may seem like a strange one. Seven and I, the Japanese owner of the ubiquitous 7-Eleven convenience stores, begged to differ: it says the acquisition of Marathon Petroleum’s Speedway gas stations allows it to tap into US economic and population growth at a time when Japan’s economy and population are moving in the opposite direction. This deal also implies that Seven and I is going to take control of more than 14,000 gas and convenience stores in North America. The marketing segment of the oil and gas industry has traditionally been one of the most resilient, so don’t be surprised to see more consolidation of gas stations in the not-too-distant future.
- Teladoc acquires Livongo for US$ 18.5 billion
Very few industries have managed to completely avoid the carnage wrought by the coronavirus pandemic. One such industry, which has not only managed to avoid the carnage but thrive, is the telehealth industry. The pandemic created a surge in demand for the services offered by companies like Livongo and Teladoc. Before the deal, each company was separately valued at US$8.5 billion, but the cash and stock deal create a company valued post-transaction at US$18.5 billion. Critics of the deal suggest that Teladoc has overpaid for Livongo and there may be big integration issues ahead for the two companies. But those behind the deal are hoping that the new users of both services added during the pandemic represent a long-term shift in patient behaviour rather than just a short-time boost to revenue.
- Morgan Stanley acquires E*Trade for US$ 13 billion
February 2020 seems like a long time ago for most people, given what has happened in the interim. But cast your mind back and you may recall that February was the month in which investment bank Morgan Stanley acquired the world’s most popular online trading platform, E*Trade. Retail investors are increasingly investing from their desktops, turning away from the traditional broker-dealer paradigm, so the deal was an obvious move by Morgan Stanley to gain a foothold in that market. With approximately US$360 billion of retail client assets, the acquisition of E*Trade increases Morgan Stanley’s AUM by over 10%. And perhaps even more importantly, the deal nearly triples Morgan Staley’s client database from 3 million to 8.2 million.