A business merger is when one company buys up another company, basically it is called merging but rarely is it what it sounds, and more likely one company is buying up a rival or buying a supplier to eventually reduce overall overheads.
These mergers are sometimes relatively small but in other cases they are huge costing perhaps millions of dollars.
Strictly speaking a merger is when two companies combine and if one company buys out another it is called an acquisition. As there is often a fine line between the two, they are generally referred to as a business merger and acquisition deal.
2012
The most notable on the recent mergers and acquisitions was in 2012 when Johnson and Johnson acquired Synthes. Although the deal had actually been worked out in 2011, it did not really take place until 2012.
Although the merger and acquisition of Johnson and Johnson with Snthes was probably the most famous of recent mergers, there are other recent tech mergers worthy of note.
A seeming trend in recent times is of US and European companies trying to gain merger or acquisition of BRIC companies. BRIC are the initials of the combined fastest and biggest emerging countries in regard to finance and trade. These countries are Brazil, Russia, India and China and these countries between them have access to 60% of world trade, a significant portion of business, for which any US or European company would be pleased to merger with.
It was perhaps because of these reasons that Medtronic’s bought China Hanghaj Holdings who were a major orthopedic manufacturer in China.
Also Straumann’s bought a 49% share in Neodent. Neodent is a manufacturer of dental products and although they make cheap products, their sales on Latin America were huge.
Another interesting acquisition was when Wright Medical Technology bought BioMimitec Therapeutics. BioMimitec were due to close in 2013 unless it obtained FDA approval to operate and so the deal was sealed for only $190 million but if the approval is forthcoming a further $190 million will have to be paid.
Other acquisitions and mergers that took place in 2012 were the acquiring of Wildfire, a social advertising start up company, by Google for $250 million, the acquiring of Yammer, a social networking tool for businesses, by Microsoft for $1.2 billion and the acquisition by Salesforce of Buddy Media, a social networking platform for $689 million.
It is often the case that large companies will buy out small emerging companies. The reason for this is that these new companies often find new niches in which to operate and when the big companies buy the new ones out, it helps to breathe new life into a perhaps otherwise aging company.
Here are some of the mergers that took place that possibly come under this heading. Samsung bought out NVELO, a software company, Dell bought out Credant, an encryption software company, Microsoft bought out StorSimple a data storage company and IBM bought out Kenexa, a maker of social resources software.