Biggest M&A deals of 2020. What happened during this exceptional year?

Reflecting on the past year is highly important in order to learn from mistakes and identify best practices and improve continuously. While reflecting on 2020 we have to mention that his year was exceptional for the M&A sector as well. The coronavirus crisis has affected the merger and acquisition deals which caused an 11-year-low of $485.3bn in the second quarter. This decrease is understandable, as company owners were occupied by reacting to the crisis as it was the first priority during these hard times. Despite the difficulties of this year, several companies have executed successful deals of great value. We have brought you some of the most important deals of 2020.

The biggest M&A deals of 2020:

8. Marvell Technology to acquire Inphi for $10B

Marvell Technology announced that it will acquire Inphi in a deal worth $10 billion. The two US-based companies will combine to form a chip company worth around $40 billion. The aim of the deal is to build high-performance chips for data centers and 5G wireless infrastructure. “Our acquisition of Inphi will fuel Marvell’s leadership in the cloud and extend our 5G position over the next decade,” said Matt Murphy, president, and CEO of Marvell.

7. The $18.5bn merger of digital health groups Livongo and Teledo

These two digital health groups finalized their merger in October in a deal valued at $18.5bn. The merger was first announced in August and was completed in only 3 months. Both companies were founded with the same mission: to create a new kind of health experience, that empowers people to live their healthiest lives, according to Jason Gorevic, chief executive officer of Teladoc Health. From the merger, they are expecting to achieve the full promise of whole-person virtual care, supported by technology and analytics.

6. Seven & i’s $21bn purchase of Speedway

Seven & i Holdings, the Japanese owner of US convenience store chain 7-Eleven, struck a $21bn all-cash deal to acquire petrol station and convenience store chain owner Speedway, which was owned by the US’s biggest oil refiner Marathon Petroleum. This deal is the largest acquisition in Seven & i’s history. The deal means that Seven & i will add around 4,000 stores across the US and Canada, consolidating its position in the US convenience store market. The transaction was reportedly heavily contested, with Seven & i outbidding its competitors by $4bn.

5. Analog Devices’ $21bn acquisition of rival Maxim

Maxim Integrated develops innovative analog and mixed-signal products and technologies and Analog Devices is a leading global high-performance analog technology company. Analog Devices acquired its rival in a deal that is worth around $21bn in stock, which will create a company that has a value of $68bn. The two companies are expecting beneficial synergies as a result of the transaction.

4. Willis Towers Watson’s $30bn tie-ups with rival Aon

Despite the lockdown in March, there were still companies that managed to execute deals of large value. The two insurance giants, Willis Towers Watson and Aon have tied up in a transaction that they had been planning for over a year. The merger that will be completed in 2021 will create a global company worth $80bn. This deal has made the world’s second and third-largest insurance brokers into an industry leaders. The new global giant will challenge March & McLennan, an actual world leader insurance company by revenues. The two groups can enjoy several synergies by combining firms, but the goal of the transaction does not cost reduction but to be more capable of addressing client needs.

3. Petrochina’s $38.4bn oil and gas pipeline sale to PipeChina

Petrochina is a state-owned oil and gas company that sold a major part of its oil and gas pipelines in China’s Oil and Gas Pipeline network in July, for 268,7 billion yuan ($37.36 billion). This deal has marked the largest industry restructuring in the past 20 years with the aim of providing market access to infrastructure and boosting investment in oil and gas production. Due to this transaction, PipeChina will become an associate company of PetroChina, a listed arm of CNPC.

2. AMD to acquire Xilinx for $35bn

AMD, an American multinational semiconductor company announced it would acquire Xilinx, an American technology company in a $35 billion all-stock deal. The transaction is expected to contribute to the margins and free cash flow generation, delivering industry-leading growth. In addition, the combination of the two firms will create the industry’s high-performance computing leader.

1. Nvidia to acquire Arm for $40bn

The chipmaker Nvidia confirmed the planned acquisition of the British chip designer Arm from Softbank for $40 billion, and it is definitely one of the biggest M&A deals of 2020.  The transaction would transform Nvidia into one of the most important players in smartphone technology. However, the deal is likely to face regulatory scrutiny. Influential companies around the world such as Apple, Samsung Electronics, and are all Arm customers and would be affected by the transaction.

In conclusion, the M&A sector has reactivated after the first wave of the crisis. Even though the M&A deals of 2020 were worth less on average than the deals of 2019, when we could see deals worth more than $70 billion, we can be hopeful regarding the future. These successful deals and cooperation prove that a merger or acquisition can provide critical competitive advantages and synergies beneficial for both parties. These transactions can be lifesaving during such hard times as a crisis.

Sources: Penews, Computerworld, Reuters, Globenewswire

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ONEtoONE is specialized in international middle-market M&A advisory, having participated in more than 1500 mandates. We continuously focus on improving the techniques to achieve the best possible price for our clients. We advise on mergers and acquisitions, strategic planning, and valuation. If you need advice for any possible corporate operation, do not hesitate to contact us.

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