The 5 Biggest Acquisitions in History

Vodaphone’s buyout of Mannesmann remains the largest corporate acquisition in history. The British telecom giant’s acquisition of the German company, which was completed in 2000, came with a multi-billion dollar price tag. To date, no other acquisition has topped it. We highlight some of the details of this major deal below, along with four of the other high-value acquisitions in global corporate history.

Understanding Acquisitions

Acquisitions are financial transactions that occur when one company buys another. They are common in the corporate world—especially if the target is a promising business. Such acquisitions, also called takeovers, are usually executed as part of a company’s growth strategy and are made for any number of reasons.

The acquiring company may want to diversify into a new sector or product line, or it may want to increase its market share and geographical outreach, reduce competition, or profit from patents and licensing that may belong to the acquired target company. Such acquisitions occur at domestic as well as global levels.

The acquisition process can be a friendly one and generally involves purchasing a majority of the target company’s shares. In some cases, though, it may not be welcomed by the target. That’s when the acquiring company may take a more hostile approach to force the acquisition.

1. Vodafone’s Acquisition of Mannesmann AG

British multinational telecom company Vodafone Group (VOD) decided to buy German telecom giant Mannesmann AG in 1999. The long-running effort by Vodafone’s AirTouch PLC finally paid off in February 2000 when Mannesmann accepted its offer for a $180.95 billion acquisition, making the takeover the largest merger and acquisition (M&A) deal in history.

As the mobile market gained momentum across the globe and growth was at its peak, the large-value merger was expected to reshape the global telecommunications landscape. However, the deal was a failure and Vodafone was forced to write off billions of dollars in the following years.

2. America Online’s Acquisition of Time Warner

The $165 billion merger between America Online (AOL) and Time Warner comes in at number two in our list of biggest acquisitions in history.

The merger occurred at the height of the dotcom era in 2000 when successful internet provider, AOL, made a bid to acquire Time Warner. At the time, AOL had a massive market share and was looking to expand even further by tapping into Time Warner’s dominance in publishing, entertainment, and news.

But, the expected synergies of the merger never fully materialized. The two companies clashed in management style and culture. This was only exacerbated by the bursting of the dotcom bubble and the ensuing recession. The value of AOL stock plummeted. The two companies eventually parted ways, spinning off to operate as independent companies.

3. Verizon Communications’ Acquisition of Verizon Wireless

This next acquisition was worth $130 billion and took place in 2013 when Verizon Communications (VZ) took over Verizon Wireless. Verizon Wireless, which was a dominant player in the U.S. wireless services market at the time. came into existence in 1999 through a merger of Vodafone’s Airtouch and Bell Atlantic’s mobile division.

As a part of the acquisition, Verizon Communications took full control of Verizon Wireless from Vodafone, leading to the end of its 14-year stint in the U.S. telecom market. The deal resulted in windfall gains for Vodafone investors as they pocketed £54.3 billion.

4. Dow Chemical’s Acquisition of DuPont

In December 2015, the two chemical conglomerates—Dow Chemical and DuPont—announced their intention to merge in a deal valued at $130 billion. Completed in September 2017, the combined companies took on the name DowDuPont and included three divisions: agriculture, materials science, and specialty products.

However, the new conglomerate’s intention was never to remain as a single unit, but instead to restructure the entity by spinning itself off into separate companies. In 2019, DowDuPont broke up into three distinct companies:

• Dow (DOW), a commodity chemical company
• DuPont (DD), a specialty chemical maker
• Corteva (CTVA), an agricultural company that produces seeds and agricultural chemicals

5. Anheuser-Busch InBev’s Acquisition of SABMiller

The world’s largest brewer acquired its rival in a merger valued at approximately $104 billion in 2016. Anheuser-Busch InBev (BUD), which makes Corona, Budweiser, and Stella Artois, took over London-based SABMiller, the maker of brands including Fosters, Castle Lager, and Redd’s. 

One focus of the merger was to create a company that could effectively compete in emerging markets with strong growth potential. According to company management, Latin America and Africa offered the brewing conglomerate opportunities to expand into rapidly growing regions with increased revenue and market share. Emerging markets continue to remain a focus, where beer represents 1.6% of gross domestic product (GDP).

The Bottom Line

Acquisitions are common in the corporate world. Most are executed during a bull run or in a particular sector with an expectation of success. But not all of them are successful. Some of the biggest disasters in M&A are attributable to multiple factors, including failures to culturally integrate both entities, overall economic conditions, and geopolitical issues.