Times of crisis are Merger and Acquisition (M&A) times.
So begins a contribution by Benjamin Pimentel from 01.04.2020 on BusinessInsider.com (unfortunately behind the paywall). This makes sense, he explains his thesis. Because in times of crisis, stock prices are lower than during the economic boom. But they also take away the pressure of competition, as there are usually few buy candidates in play. Although, if you read the whole article (behind the paywall), you will come to the conclusion that the takeover carousel is spinning with Amazon, Facebook, Oracle, Microsoft, SAP, Google, Workday and many more.
As soon as we are halfway out of the crisis, companies with well-filled wallets will become active as buyers. The author, Robert Siegel, quotes a professor at Stanford.
Of course, it is mainly weak, smaller companies that will be bought up. This is, I always say, a law of nature according to the motto “eat or be eaten”. But even with the “big animals” a take over cannot be ruled out. The turf war ridden to the desire for power and takeover.
The takeovers after the last big recession were e.g. Microsoft buys Nokia and Oracle buys Sun and Peoplesoft. A US M&A specialist puts it this way: Crises end when big companies are taken over by bigger ones. He mentions the LinkedIn purchase from Microsoft and the Netsuite takeover by Oracle.
So what is the game plan after Corona?
The big tech companies will become active, several people have predicted that. Prof. Siegel says that this will not happen before the next 3 to 9 months. At the moment they are all still in crisis mode.
Business Insider has asked experts which takeovers are likely. This brought together 15 assessments. Whereby we know from our report “Google takes over Salesforce” at the beginning of the year what the rumors may be true. Nothing! At least for the time being.
We have compiled the 15 assessments of simplicity as a graphic.
- Xerox is interested in HP
- Oracle to HP Enterprise
- Microsoft to Salesforce
- Google to Salesforce
- Microsoft to Workday or ServiceNow
- Amazon to Oracle
- Oracle to Workday
- Microsoft to Adobe
- IBM to Dell
- SAP to Workday
- Apple to Tesla
- Salesforce to Twitter
- Google to ServiceNow or Workday
- Apple to Netflix
- Facebook to Oracle
What does that tell us?
The takeover carousel is spinning with Amazon, Facebook, Oracle, Microsoft, SAP, Google, Workday and many more. Some names come up more often. Is that good or bad? For Workday and ServiceNow the multiple naming is certainly good. This desire improves the negotiating position. At least as long as Workday and ServiceNow come out of the crisis well.
The assessment at Oracle is much more exciting. Dirty Larry certainly does not want to be bought by greenhorn Zuckerberg. But with Jeff Bezos an identical alpha male would sit at the other end of the negotiating table, but the better tactician.
As always, we’ll see. As the vernacular says: In the end it comes differently than you think.
Picture source: 1A Relations GmbH with information from www.BusinessInsider.com; Logos: From the manufacturers
Note: This is a machine translation. It is neither 100% complete nor 100% correct. We can therefore not guarantee the result.