Global mergers and acquisitions (M&A) activities are forecast to continue to face difficulties such as economic recession fears, rising interest rates, sharp declines in stock prices, and geopolitical tensions in Ukraine… However, the first quarter of 2023 also witnessed some “terrible” M&A deals.
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Microsoft: More than a year of pursuing a $69 billion deal
In January 2022, US technology giant Microsoft announced that it would spend nearly 69 billion USD to buy Activision Blizzard, the company that provides many famous games such as Call of Duty, Diablo, Candy Crush. This decision by Microsoft is intended to give this world’s largest software corporation an extra edge in the competition in the metaverse world.
Microsoft’s offer surpassed the M&A deal in which US computer company Dell bought EMC for $67 billion six years ago. It is also much higher than the $ 26 billion Microsoft spent to buy the social network LinkedIn in 2016.
Microsoft signboard. Photo: VNA
However, the $69 billion deal has not been approved by US authorities because of concerns that the takeover will lead to a monopoly. Sony, another big name in the game industry, also tried to keep the deal from happening. However, Microsoft still persistently clings to this huge deal. Microsoft President Brad Smith said at a press conference on February 21, 2023 that he is more optimistic about acquiring Activision following Nvidia’s licensing deal and a similar deal with Nintendo Co Ltd.
Smith said he believes the Nvidia deal could ease concerns about the Activision Blizzard acquisition by ensuring consumers have more ways to access Microsoft-controlled games. Nvidia said it supported Microsoft’s acquisition of Activision. So Nvidia integrated Xbox games into GeForce Now, a service that has 25 million users in more than 100 countries worldwide.
Microsoft is committed to keeping the game “Call of Duty” on rival Sony’s PlayStation console. The US technology giant says that the acquisition of Activision Blizzard is not only aimed at “Call of Duty” but will accelerate Microsoft’s growth in the field of mobile, personal and computer games. cloud, and portable electronic devices.
Newmont buys Newcrest for $17 billion
US company Newmont Mining, the world’s largest gold miner, is in due diligence (DD) to purchase the entirety of Newcrest Mining, Australia’s number one gold mining company, with worth about 17 billion USD.
Newmont Mining announced its intention to acquire Newcrest Mining in early February 2023 in the hope that the deal will help Newmont increase gold mining in Australia and Canada.
A Newmont Mining gold mine. Photo: Mining Technology
Kitco News, a website specializing in the world’s gold industry, always ranks Newmont Mining at number 1 in gold mining, and Newcrest Mining is also in the Top 10 of Kitco News. Newmont firmly at the top of the table also thanks to M&A. In 2019, the company spent $ 10 billion acquiring rival Goldcorp Inc. of Canada to create the largest gold mining company in the world.
Recent years have witnessed more M&A deals in the world’s gold mining industry because the reserves of gold mines being exploited are somewhat reduced, leading to higher production costs. Therefore, mergers and acquisitions or alliances are seen as an appropriate solution.
Toshiba agrees to sell for 15.3 billion USD
The famous and long-standing energy and electronics corporation Toshiba (Japan) is about to be sold after many years of efforts to save the poor situation despite the support of the Japanese Government. Toshiba is backed by the government because Toshiba’s nuclear power production is important to national security, but the industry is involved in decommissioning the destroyed Fukushima Daiichi nuclear power plant in the double disaster. March 2011 earthquake and tsunami. Therefore, the Japanese government does not accept a foreign company to acquire Toshiba.
Toshiba is a long-standing Japanese brand. Photo: Bloomberg
And on March 23, 2023, Toshiba’s Board of Directors agreed to an offer to buy back about 2 trillion yen ($15.3 billion) from a group led by a domestic private equity firm led by Japan Industrial Partners (JIP). ) leader. Toshiba’s management, the Japanese government and most foreign shareholders are at odds over the future of the corporation. Investors, as always, want to maximize profits but the government’s priority is not to let technology secrets fall into foreign hands.
With a price agreed by the Board of Directors, if the transaction is successful, it will be one of the largest deals in Asia this year in the general difficult situation of the global world. It will also become one of the largest corporate M&A deals ever in Japan.
The original Toshiba was founded in 1875 and released the world’s first notebook computer for the mainstream market in 1985. Along with Sony and Sharp, Toshiba had a golden age when the Japanese electronics industry The version that led the world for quite a long time. After the 2011 earthquake and tsunami disaster, Toshiba was hit hard but managed to weather the disaster. However, the corporation was involved in a major accounting scandal that came to light in 2015. In this scandal, Toshiba was found to have a series of widespread accounting errors that lasted for many years.
After the scandal was discovered, the corporation announced the layoff of 6,800 employees. In the fiscal year that ended in 2017, Toshiba lost $8.8 billion. The group has undergone a complete restructuring in the hope of regaining its former position, but investors and Toshiba executives are constantly at odds over the future of the group – it is this split that makes a business so historic. nearly 150 years of history must be sold.
The fall of the horse named “Swiss bank”
On March 19, 2023, Switzerland’s largest bank, UBS, agreed to buy Credit Suisse, Switzerland’s second largest bank and also a rival of UBS, for about $3.2 billion.
The deal, the largest bank acquisition in years, was pushed by Swiss banking regulators in an attempt to prevent a serious decline in confidence in the global banking system. CNN of the US called this an “emergency rescue deal”, and the main rescuer was Credit Suisse, which was on the verge of collapse after the collapse of US bank Silicon Valley Bank (SVB) about 10 days earlier. .
The deal is also the first mega-merger of systemically important global banks since the 2008 global financial crisis.
The Swiss government said it would provide more than $9 billion to offset some of the losses UBS may have suffered when it bailed out Credit Suisse with a buyback. Announcing UBS’ “save” of Credit Suisse, the Swiss National Bank (SNB) said the deal was meant to “ensure financial stability and protect the Swiss economy”. SNB will provide over $100 billion in liquidity to UBS to facilitate the deal.
