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Biggest M&A Deals from 2020

Show Notes Of Podcast

Biggest M&A deals in 2020

  1. US$30 billion acquisition of Willis Towers Watson by AON
  2. US$21 billion acquisition of Maxim Integrated by Analog Devices
  3. US$21 billion acquisition of Speedway gas stations by Seven and I
  4. US$18.5 billion acquisition of Livongo by Teladoc
  5. US$13 billion acquisition of E*Trade by Morgan Stanley
  6. US$7.3 billion acquisition of GrubHub by Just Eat
  7. US$6 billion acquisition of Credit Karma by Intuit

Despite being one of the most tumultuous years on record for the global economy, there have been several so-called ‘mega-mergers’ across a range of industries, with a few even recording record-breaking transactions. Given the virtual data room services that DealRoom provides for thousands of transactions every year, we like to keep a finger on the pulse of M&A. Below, we look at some of the biggest deals of 2020 (so far), all of which we feel are likely to have significant implications for their respective industries in the years ahead.

Despite being one of the most tumultuous years on record for the global economy, there have been several so-called ‘mega-mergers’ across a range of industries, with a few even recording record-breaking transactions. Given the virtual data room services that DealRoom provides for thousands of transactions every year, we like to keep a finger on the pulse of M&A. Below, we look at some of the biggest deals of 2020 (so far), all of which we feel are likely to have significant implications for their respective industries in the years ahead.

Biggest M&A deals in 2020

  1. US$30 billion acquisition of Willis Towers Watson by AON
  2. US$21 billion acquisition of Maxim Integrated by Analog Devices
  3. US$21 billion acquisition of Speedway gas stations by Seven and I
  4. US$18.5 billion acquisition of Livongo by Teladoc
  5. US$13 billion acquisition of E*Trade by Morgan Stanley
  6. US$7.3 billion acquisition of GrubHub by Just Eat
  7. US$6 billion acquisition of Credit Karma by Intuit

1. US$30 billion acquisition of Willis Towers Watson by AON

In the future, risk assessors may look back at 2020 as the year which defined the term, ‘black swan event’. But the year will also be notable for a different reason: the US$30 billion of Willis Towers Watson by AON - the insurance industry’s largest ever acquisition. The combination, which should be confirmed in the first quarter of 2021, comes at a time when the insurance industry faces a range of new threats ranging from coronavirus in the short-term to climate change and cyber security in the long-term. The all-stock deal makes AON (which the merged company will be called) the largest insurance broker in the world.

2. US$21 billion acquisition of Maxim Integrated by Analog Devices

Analog Devices is one of those companies that not everybody will have heard of, but one that they will all have come into contact with on a daily basis. As the world’s largest manufacturer of semiconductors, Analog (as it’s more commonly referred to) produces the chips and electronics that power some of the most well-known products in the healthcare, automotive, industrial and consumer segments. Its acquisition of Analog Devices - another all-share deal, reflecting the ongoing pandemic environment in which companies are hoarding cash - strengthens its position as the number one in its industry. And with both companies specializing in different industries, the deal is expected to yield synergies of close to US$300 million.

3. US$21 billion acquisition of Speedway gas stations by Seven and I

During a year which has seen most people work at least a few months from home, reducing the need for transport, 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. The deal also means that Seven and I will control 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.

4. US$18.5 billion acquisition of Livongo by Teladoc

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 creates 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.

5. US$13 billion acquisition of E*Trade by Morgan Stanley

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.

6. US$7.3 billion acquisition of GrubHub by Just Eat

Up until Just Eat announced that it had acquired GrubHub in June 2020, it looked as though Uber was going to acquire America’s most popular food delivery company. The last minute swoop by Just Eat means the company now has a large footprint in over 13 different countries and becomes the world’s largest food delivery company. At the time of the acquisition, Just Eat announced that GrubHub had over 300,000 restaurants spread across 4,000 US cities. Although the deal creates a dominant name in food delivery, it’s difficult to see what the benefit from scale is for Just Eat. Furthermore, 2020 was marked by strikes by gigging couriers across the world suggesting choppy waters ahead for the food delivery industry and possibly the gig industry as a whole.

7. US$6 billion acquisition of Credit Karma by Intuit

Intuit may be better known to most as the financial platform company behind popular software programs such as Turbo Tax, QuickBooks and Mint. Although Intuit has a long history of acquisitions, this latest, all-cash transaction with Credit Karma, is the biggest by some distance. From the outside, the deal looks like a winner. Intuit can add Credit Karma’s popular credit rating tools to its bundle to offer its clients a complete suit of personal finance tools. Not to mention the fact that the deal creates a highly complementary dataset: What could make Credit Karma’s credit scores even more accurate? Direct access to people’s financials and tax returns.

Despite being one of the most tumultuous years on record for the global economy, there have been several so-called ‘mega-mergers’ across a range of industries, with a few even recording record-breaking transactions. Given the virtual data room services that DealRoom provides for thousands of transactions every year, we like to keep a finger on the pulse of M&A. Below, we look at some of the biggest deals of 2020 (so far), all of which we feel are likely to have significant implications for their respective industries in the years ahead.

Biggest M&A deals in 2020

  1. US$30 billion acquisition of Willis Towers Watson by AON
  2. US$21 billion acquisition of Maxim Integrated by Analog Devices
  3. US$21 billion acquisition of Speedway gas stations by Seven and I
  4. US$18.5 billion acquisition of Livongo by Teladoc
  5. US$13 billion acquisition of E*Trade by Morgan Stanley
  6. US$7.3 billion acquisition of GrubHub by Just Eat
  7. US$6 billion acquisition of Credit Karma by Intuit

1. US$30 billion acquisition of Willis Towers Watson by AON

In the future, risk assessors may look back at 2020 as the year which defined the term, ‘black swan event’. But the year will also be notable for a different reason: the US$30 billion of Willis Towers Watson by AON - the insurance industry’s largest ever acquisition. The combination, which should be confirmed in the first quarter of 2021, comes at a time when the insurance industry faces a range of new threats ranging from coronavirus in the short-term to climate change and cyber security in the long-term. The all-stock deal makes AON (which the merged company will be called) the largest insurance broker in the world.

2. US$21 billion acquisition of Maxim Integrated by Analog Devices

Analog Devices is one of those companies that not everybody will have heard of, but one that they will all have come into contact with on a daily basis. As the world’s largest manufacturer of semiconductors, Analog (as it’s more commonly referred to) produces the chips and electronics that power some of the most well-known products in the healthcare, automotive, industrial and consumer segments. Its acquisition of Analog Devices - another all-share deal, reflecting the ongoing pandemic environment in which companies are hoarding cash - strengthens its position as the number one in its industry. And with both companies specializing in different industries, the deal is expected to yield synergies of close to US$300 million.

3. US$21 billion acquisition of Speedway gas stations by Seven and I

During a year which has seen most people work at least a few months from home, reducing the need for transport, 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. The deal also means that Seven and I will control 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.

4. US$18.5 billion acquisition of Livongo by Teladoc

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 creates 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.

5. US$13 billion acquisition of E*Trade by Morgan Stanley

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.

6. US$7.3 billion acquisition of GrubHub by Just Eat

Up until Just Eat announced that it had acquired GrubHub in June 2020, it looked as though Uber was going to acquire America’s most popular food delivery company. The last minute swoop by Just Eat means the company now has a large footprint in over 13 different countries and becomes the world’s largest food delivery company. At the time of the acquisition, Just Eat announced that GrubHub had over 300,000 restaurants spread across 4,000 US cities. Although the deal creates a dominant name in food delivery, it’s difficult to see what the benefit from scale is for Just Eat. Furthermore, 2020 was marked by strikes by gigging couriers across the world suggesting choppy waters ahead for the food delivery industry and possibly the gig industry as a whole.

7. US$6 billion acquisition of Credit Karma by Intuit

Intuit may be better known to most as the financial platform company behind popular software programs such as Turbo Tax, QuickBooks and Mint. Although Intuit has a long history of acquisitions, this latest, all-cash transaction with Credit Karma, is the biggest by some distance. From the outside, the deal looks like a winner. Intuit can add Credit Karma’s popular credit rating tools to its bundle to offer its clients a complete suit of personal finance tools. Not to mention the fact that the deal creates a highly complementary dataset: What could make Credit Karma’s credit scores even more accurate? Direct access to people’s financials and tax returns.

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