The biggest corporate mergers of the 21st century
Mergers are high points in the life of companies. The biggest corporate mergers of the 21st century are no exception. In this article, we will discuss the most important corporate mergers that took place in the third millennium.
Definition of a business merger
A business merger is the pooling of the assets of two or more businesses . This merger can lead to the creation of a new entity or to the takeover of one company by another.
There are four types of corporate merger:
- Merger-absorption : this is the most common type of merger. It consists of transferring the assets of the absorbed company to the acquiring company (employees, employment contracts, equipment, etc.).
- Merger creation : rather rare, this type of merger consists of creating a new company from the merger of several companies.
- Merger by contribution of securities : this merger is based on an exchange of securities. The absorbed company gives securities to the absorbing company. Thus, the latter can take control of the absorbed company.
- Merger by partial contribution of assets : a company receives the contribution of assets and liabilities from another company. The contribution is then remunerated by shares in the absorbing company. Payment takes place through the allocation of securities and shares.
Why do companies merge?
Mergers are not easy processes to set up. So why are so many companies going down this path? Here are the main reasons:
- Facing economic difficulties requiring restructuring
- Safeguarding the assets of a company in difficulty
- Gain in performance, have more market share or be more competitive
- Increase its place in the market through the absorption of a competitor
- Acquiring know-how and new skills
- Mutualize costs (human, logistics, production, real estate, etc.)
- Accelerate the growth of the acquiring company
What are the biggest corporate mergers of the 21st century?
The three biggest corporate mergers of the third millennium involved American, British and German companies.
1. Vodafone AirTouch – Mannesmann AG: $202.8 billion
The British Vodafone AirTouch acquired the German conglomerate at the very beginning of the 21st century, in February 2000. The main reason that motivated Vodafone AirTouch to merge with Mannesmann AG was that the German had developed a successful telecoms department in the 90s.
2. AOL – Time Warner: $181.6 billion
The second largest acquisition in history is to the credit of AOL. This young internet service provider at the time, FAI, decided in January 2000 to merge with the Hollywood studios Time Warner. America On Line (AOL) made this merger just before the internet bubble burst. After the bursting of this bubble, AOL recorded a loss estimated at nearly 100 billion dollars. What puts a stop to this new structure: in 2009, Time Warner separates from AOL .
3. Verizon Communications – Cellco (Verizon Wireless): $130.3 billion
Originally, the American Verizon Communications and the British Vodafone created a joint venture: Cellco Partnership. Verizon Communications held 55% of the shares and Vodafone the remaining 45%. In 2013, Verizon bought back its missing shares: it became the leading mobile operator in the United States, thanks also to the acquisition of Alltel Wireless.
The role of Reactive Executive during a merger acquisition
To succeed in a merger acquisition , you need specific skills and expertise. Although many companies are planning to merge, few of them have the internal human resources to do so in an optimal way.
Indeed, only professionals with a particular profile will be able to manage these large-scale projects. They have received adequate training, have accumulated experience both in France and abroad and know the latest regulations in force.
The role of Reactive Executive is to provide you with managers capable of carrying out this type of mission.
How to start an Interim Management Mission?
A mission with Reactive Executive takes place in 4 phases.
1°) We define with you your needs and objectives. Once the course has been set, we are able to move on to the second stage: the choice of the interim manager.
2°) We scrupulously select the manager according to his profile and your expectations. Then we organize an interview with the interim manager.
3°) Once all the actors are together, the mission can begin. In close collaboration with you and your teams, our manager proceeds to the proper deployment of the strategy established upstream and to the follow-up of the actions carried out.
4°) At the end of the mission, an assessment is made to assimilate the repercussions of our action and to take stock of the objectives established at the beginning of the mission.
Choosing the right interim management firm
To ensure that your merger and acquisition takes place under the best conditions, we advise you to choose a firm of interim managers with a dense and diversified network. This important network allows the firm to choose the right manager to carry out its mission.
The second criterion to check is the international presence of your firm. To carry out operations requiring a global vision, such as the acquisition of a subsidiary for example, this criterion ensures that your firm is well able to take into account the various aspects related to international affairs.
The places of intervention of Reactive Executive
Our field of action extends internationally. We also operate in France. For more than 10 years now, we have been supporting start-ups , ETIs , SMEs/SMIs and large groups on their digital transformation and relay management projects. These experiences make us one of the leading firms in the field of interim management.
How to become an interim manager?
To become an interim manager at Reactive Executive , you must have acquired at least 20 years’ experience in project management (General Management, HRD, financial management, etc.). You must also be mobile to be able to best meet the needs of our customers in the field.
Also, you must have led projects in different fields and have developed a generalist, even specialized profile (knowledge of Chinese, in-depth knowledge of an industrial sector, etc.).
