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November 01, 2022 4 minute read

6 Influential M&A Deals in 2022

While the volume of global mergers and acquisitions (M&As) dropped by around 24% in the first half of 2022 compared to the first half of 2021, the year has witnessed some mega deals. Amid the increasing inflation rate, geopolitical instability, rising interest rates, uncertainty, and turmoil, 2022 has emerged as a solid year for M&A deals, with the overall numbers matching healthy pre-pandemic levels.

While international economies continue to recover from the effects of the pandemic, this is a suitable time for companies interested in growth to merge with or acquire their potential counterparts. Big players in sectors such as technology, cybersecurity, gaming, and healthcare have signed M&A deals since this year began, and the trend doesn’t look like it’s stopping anytime soon.

Here are the top M&A deals in 2022.

1. Microsoft’s $68.7 Billion Acquisition of Activision Blizzard

Microsoft’s acquisition of Activision Blizzard, a leading game developer, and content publisher, is the most significant gaming deal of 2022. On Jan. 18, Microsoft announced its agreement to take over Activision Blizzard in an all-cash transaction, spending $95 per share for a total value of $68.7 billion. 

The takeover includes iconic Activision, Blizzard, and King franchises such as Overwatch, Diablo, Candy Crush, Warcraft, and Call of Duty. After taking over Activision Blizzard, Microsoft will rank as the world’s third-largest company in gaming revenue, behind Sony and Tencent. 

Microsoft’s purchase of Activision Blizzard resulted from the company’s interest in the dynamic gaming sector, allowing users to access entertainment globally across all devices. 

“Players everywhere love Activision Blizzard games, and we believe the creative teams have their best work in front of them,” said Phil Spencer, CEO of Microsoft Gaming. “Together, we will build a future where people can play the games they want, virtually anywhere they want.”

Microsoft’s board of directors has signed the takeover plan, and the deal is expected to close in 2023, subject to the completion of regulatory reviews and customary closing conditions.

2. Broadcom’s Acquisition of VMware for $61 Billion

On May 25, Broadcom announced an agreement to acquire VMware for stock and cash valued at $61 billion. Broadcom will also take over VMware’s net debt, worth $8 billion, as part of the deal.

Broadcom — a technology corporation that designs and produces semiconductors — aims to rebrand as VMware, with a mission of providing customers with various choices to build and manage their applications from anywhere worldwide.

During the takeover announcement, the president of Broadcom’s software group, Tom Krause, said that the transaction would help the company provide customers with infrastructure software. Although the two companies address different needs, Krause added that the combination would provide a more secure and effective way to address the critical needs of their IT customers.

The acquisition will close in 2023 with the unanimous agreement of Broadcom’s and VMware’s boards of directors and shareholders, upon which Broadcom will rebrand as VMware.

3. AMD’s Acquisition of Xilinx for $49 Billion

On Feb. 14, Advanced Micro Devices (AMD) completed its acquisition of Xilinx, the largest acquisition ever in the semiconductor industry’s history. The acquisition was an all-stock deal valued at $49 billion.

The deal was around $35 billion when it was first announced in late 2020, but its value climbed as AMD shares soared. Upon close, Xilinx shareholders were paid 1.7234 shares of AMD (or cash instead of any fractional shares) for each share owned in Xilinx common stock. After the deal, Xilinx stopped trading on the Nasdaq stock exchange.

AMD has been a leader in designing graphics processing units (GPUs) and central processing units (CPUs). In contrast, Xilinx has been a leading developer of specialty chips known as field-programmable gate arrays (FPGAs) and system-on-a-chip (SOC) devices. 

With the acquisition, AMD aims to expand beyond its core GPU and CPU product lineup to include reprogrammable chips in its portfolio. It will also increase its opportunities in data centers, telecommunications, and embedded computing. 

4. Oracle’s Acquisition of Cerner for $28 Billion

On June 8, software giant Oracle closed its $28.3 billion deal to acquire electronic health record company Cerner. Initially announced in December 2021, was Oracle’s largest acquisition, overtaking its $10.5 billion acquisition of PeopleSoft in 2005. It was also the largest completed digital health deal to date. 

The acquisition was an all-cash deal, with Cerner valued at $95 per share. Before the deal’s closing, the Oracle-Cerner matchup received all the necessary regulatory approvals, including European Union clearance.

Following the acquisition, Cerner will remain a standalone business unit within Oracle. This will allow Oracle to expand its database software and cloud systems into the healthcare space. When announcing the deal, Oracle stated that the unit would focus on medical software usability and voice-supported user interfaces to free healthcare providers to focus on caring for their patients.

5. Advocate Aurora Health’s Merger With Atrium Health for $27 Billion

In May, Atrium Health and Advocate Aurora Health announced a unanimous agreement to merge between both companies’ boards of directors. The combined organization aims to create a health and wellness delivery system that will cater to patients’ needs.

Both companies would have an equal number of board seats. Edward Brown, the board chair of Atrium Health, would serve as the first chair until the end of 2023, after which Michele Richardson, Advocate Aurora Health’s chair, would take over for a two-year term. The combined organization would also have one executive team and a single board, although there won’t be any transfer of assets due to the combination.

Atrium Health runs 40 hospitals throughout Alabama, Georgia, North Carolina, and South Carolina, with annual revenue of $13 billion. On the other hand, Advocate Aurora Health runs 27 hospitals in Wisconsin and Illinois, generating $14 billion in annual revenue. If the deal is approved, the new organization will become one of the biggest health systems in the country, with about $2.7 billion of combined revenue, 5.5 million patients, 1,000 care sites, 148,000 employees, and $4.8 billion in yearly community benefits.

The two companies will operate under the brand name Advocate Health, with headquarters in Charlotte. 

6. Adobe’s Acquisition of Figma for $20 Billion

On Sept. 15, Adobe announced it had agreed to acquire Figma in a half-stock, half-cash transaction amounting to $20 billion. Adobe will grant Figma 6 million restricted stock units in the transaction, while the other half will be through cash on hand or a term loan.

Adobe’s motive behind taking over Figma is to bring digital experiences that can change the world through creative collaboration and steered productivity. 

The acquisition is expected to boost Adobe’s web capabilities. Figma, founded in 2012, offers cloud-based design software enabling teams to collaborate in real-time. It’s a direct competitor to Adobe XD. The acquisition allows Adobe to upgrade in an area where it struggles. 

Adobe indicated it aims to integrate its own photography, imaging, video, illustration, font, and 3D abilities into the Figma platform.

Overall, the deal is expected to close in 2023, and each company will operate independently until then.

Get Your M&A Deal Tracking Software Today

Despite the prevailing economic uncertainties worldwide, M&A deals are still as prevalent as ever. Going forward, the number of M&A transactions is expected to rise even further as more sellers look to potential buyers as a source of financial support in the post-pandemic era. Many companies are also entering into mergers to boost their technological capabilities. 

With that said, M&A executives cannot continue to use the same strategies they used in the pre-pandemic era. They must revisit their playbooks and carefully plan and investigate the possible outcomes before undertaking M&A transactions.

To ensure everything runs smoothly during your merger or acquisition, you need a well-laid record. Starting from the inception of the M&A idea to the completion of the agreement and beyond. Through a well-defined integration system, executives are accountable and can provide precise data for tracking and analysis throughout the transaction.

Devensoft’s M&A software provides a seamless integration platform through which executives can track deal data, scrutinize documents, and create and analyze reports in one place. 

Sign up to talk with one of our experts and experience an effective integration as you fuel your company’s strategic growth.

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