Top 10 most expensive corporate acquisitions
Recently, Apple's $3 billion purchase of Beats created a lot of buzz; but did you know that it wasn't the most costly corporate acquisition ever made? As a matter of fact, the following list makes Beats' price tag look like a drop in the bucket.
10. Sanofi acquires Aventis for $73.5 billion
What does a French pharmaceutical company do when it wants to increase its grip on the international pharmaceutical market? Well, if that company is Sanofi (then Sanofi-Synthélabo), it stages a hostile takeover of its competitor, Aventis. Unfortunately for Sanofi, Aventis fought back by diluting shares to skirt the bid. Ultimately, the French government got involved, bringing both sides to the agreement that Sanofi and Aventis would merge — at the cost of $73.5 billion — to form Sanofi-Aventis.
9. Comcast acquires AT&T Broadband for $76.1 billion
Back in 2001, AT&T Broadband was AT&T's cable television arm — which, naturally, put them in competition with Comcast. So, when Comcast decided to acquire AT&T Broadband that year, both sides considered it beneficial. AT&T because it wasn't planning to grow its cable television division anyway, and Comcast because it made it the biggest cable provider in the country.
8. Royal Dutch Shell acquires Shell Transport and Trading for $80.1 billion
No, it's not a coincidence that these companies both have "Shell" in their names. Yes, they basically were owned by the same people, as they were the by-products of a 1907 merger between Royal Dutch Petroleum Company and Shell Transport and Trading. At that time, though, bad blood among the nations wasn't conducive to a merger. Fast forward to 2004 when the time did prove conducive, and Royal Dutch Shell scooped up Shell Transport and Trading for a cool $80.1 billion so that the branches could finally merge their business dealings under one company.
7. Exxon acquires Mobil for $80.3 billion
Think back to the early '90s, if you will. Once you get past the vision of your younger self in acid wash jeans, you may well remember that Exxon and Mobil were two of the largest oil companies around. In 1998, though, Exxon acquired Mobil for $80.3 billion, thereby becoming one of the largest — the third largest, to be exact — and most-recognized oil companies in the world.
6. SBC acquires AT&T for $83.1 billion
After courts ruled in 1984 that AT&T needed to form several smaller subsidiaries in accordance with antitrust laws, the telephone company did just that. SBC Communications was one of those subsidiaries that, in 2005, actually purchased the former parent company. After plunking down the $83.1 billion to secure the bid, SBC took on AT&T's name and began doing business as the new AT&T.
5. Pfizer acquires Warner-Lambert for $87.3 billion
Much like the Sanofi-Aventis merger, Pfizer acquiring Warner-Lambert had a lot to do with quelling the competition — pharmaceutical companies apparently aren't too keen on competition. So in 2000, major pharmaceutical player Pfizer bought Warner-Lambert for $87.3 billion and put an end to the centuries-old competition once and for all.
4. Fortis, Banco Santander, Royal Bank of Scotland Group acquire ABN AMRO for $100 billion
This merger cost Fortis, a financial service provider, a lot — actually, it pretty much cost Fortis everything. With the help of Banco Santander and the Royal Bank of Scotland Group, Fortis acquired the Dutch bank of ABN AMRO in 2007. Unfortunately for Fortis, 2008 came and with it came the global financial crisis. This created a major financial crisis for Fortis, and it couldn't afford to finance the acquisition anymore. Accordingly, it had to sell off assets and re-brand to do damage control, but, alas, it did little to fix the damage that had already been done.
3. Altria Group "spins off" Philip Morris International for $107 billion
This is kind of another case of the right hand paying the left. Back in the early 2000s, the corporation now known as Altria Group was known as Philip Morris Companies, Inc. However, perhaps hoping to separate its name from its multiple tobacco holdings, the company re-branded to its current incarnation. Then, several years later, it sold off its international presence for $107 billion, while the parent company remained in the tobacco business.
2. Vodafone AirTouch acquires Mannesmann for $185.1 billion
They can't all be happy mergers, and telecommunications company Vodafone AirTouch acquiring competitor Mannesmann certainly started off on the wrong foot. The trouble can seemingly be traced back to the mid '90s, when Mannesmann began encroaching on Vodafone's "territory" in the UK. Vodafone decided that, in turn, it would stage a coup — the company launched a controversial hostile takeover. However, all's well that ends well, we suppose. Mannesmann agreed in 2000 to the terms of Vodafone's merger, and it was absorbed into the company.
1. America Online acquires Time Warner for $186.2 billion
Talk about an unsound investment! Back in 2000 when America Online purchased Time Warner for an obscene $186.2 billion, it clearly must have had high hopes for the merger. At the time, AOL was the reigning master of the internet, while Time Warner was a top dog in the cable TV market. Conceivably, you put the two together and you get a media powerhouse, right? Apparently not. The merger didn't really do either company good, and they parted ways less than a decade later.