Last week, we took a look at M&A failures throughout history. We discussed how looking at M&A failures and analyzing the context surrounding the failure can give you insight into the future of mergers and acquisitions. Similarly, examining recent M&A successes can be intuitive. Here are three recent M&A successes.
Johnson & Johnson, the world’s largest, most diversified healthcare products company acquired Abiomed, Inc. in 2022. Abiomed was a leader in medical technology with a focus on heart, lung, and kidney support. J&J purchased Abiomed for $380 per share, a 50% increase over Abiomed’s trading price at the time.
Abiomed has since functioned as a separate entity, going as far as to claim this was a merger of brands, not businesses. The goal of this merger was market expansion and sharing technologies, rather than the dissolution of one of the entities. After the deal announcement, the stock price of Johnson & Johnson rose by 8%.
In 2017, Amazon purchased Whole Foods Market as its debut into the brick-and-mortar department. This $13.7 billion acquisition didn’t seem like the most sensical choice initially. Amazon has dominated the e-commerce market for years and has subsequently built a reputation for being the site you can go to for anything and get it delivered in only two days. Whole Foods Market has a specialty in the organic and artisanal, almost the inverse of their acquirer.
Regardless, this merger was nothing short of successful. This merger catapulted Amazon into the retail space. Additionally, Amazon has continuously tested new technologies like autonomous shopping in Whole Foods spaces. Conversely, Amazon has integrated same-day delivery from local Whole Foods Markets directly into their app.
In 2019, Disney purchased 21st Century Fox for a whopping $52.4 billion. This deal opened the doors to potential lucrative crossovers between the two titans of entertainment. This well-timed acquisition also doubled Disney’s stake in Hulu, giving it a controlling stake in the company. This occurred right before the release of their streaming platform, Disney+. Disney+ now features a native Hulu integration.
In the years following their merger, Disney fully dropped the Fox branding. Various subsidiaries of 21st Century Fox were rebranded to 21st Century or Disney titles. Earlier this year, Disney announced they’d be vacating the original Fox Studio Lot in Century City. Remaining operations will be migrated to the Walt Disney Studios Lot in Burbank, California.
Well-timed, properly researched mergers and acquisitions can greatly increase the value of your business. Whether you’re interested in a merger or acquisition for market expansion, a desire for new technology, or achieving new synergies, due diligence is important. None of these aforementioned deals would have been successful without careful consideration and consultation. If you’re considering buying or selling a business, consult with one of Stony Hill’s trusted advisors today.