Significant increase in mergers and acquisitions in 2005around the world. Factors like opening up of Europe to international mergers and acquisitions and a growing sense of comfort among investors about acquisitions contributed to this growth. Major sectors where maximum mergers and acquisitions took place were – finance and banking, food and beverages, computers and IT, consumer goods, pharmaceutical sector, telecom and travel and transport.
In 2005 high growth rate of mergers and acquisitions occurred around the globe. In fact after the year 2000, which was considered to be a benchmark in the area of mergers and acquisitions, 2005 turned out to be yet another year of that stature. The value of mergers and acquisitions totaled 3.3 trillion US dollars in 2000. By November 2005, a total of 2.3 billion US dollars worth of mergers and acquisitions had taken place. The phenomenal rise in mergers and acquisitions in 2005 have been attributed to the growing feeling among companies that it is better to buy an established organization than to build one right from the scratch.
The important factors that contributed to the growth of mergers and acquisition sin 2005 were-
Growing sense of comfort among investors about acquisitions. Uncertainties that used to exist earlier no longer existed.
Increased availability of cash with the companies
Opening up of Europe to international mergers and acquisitions.
Acquisitions helped in cost cutting exercises.
The important mergers and acquisitions of 2005 can be studied sector wise.
Mergers and acquisitions in the financial and banking sector in 2005
Important mergers and acquisitions in the financial and banking sectors in 2005 included –
Acquisition of Citigroup’s travelers’ life insurance by Metlife.
Merger of Gemplus and Axalto.
Bank of America’s acquisition of MBNA.
Acquisition of Metris by HSBC
Mergers and acquisitions in the food and beverages sector in 2005
In the food and beverages sector important merger and acquisition deals in 2005 included the following –
Acquisition of Salad Express by Chiquita
Southcorp, an Australian winemaker was acquired by Foster’s – another Australian group.
Spirit group acquired by Punch Taverns of UK.
Mergers and acquisitions in the computers and IT sector in 2005
In the computers and IT sector important merger and acquisition deals in 2005 included –
Acquisition of Macromedia by Adobe.
Acquisition of Siebel by Oracle.
Acquisition of StorageTek by Sun Microsystems.
Skype acquired by eBay.
Scientific Atlanta acquired by Cisco.
Acquisition of Maxtor by Seagate.
Mergers and acquisitions in the consumer products sector in 2005
Important mergers and acquisitions in this sector were –
Gillette acquired by Procter and Gamble.
Acquisition of Reebok by Adidas.
Acquisition of maytag by Whirlpool.
Mergers and acquisitions in the pharmaceutical sector in 2005
Hextel and Eon Labs acquired by Novartis.
Chiron acquired by Novartis.
ID Biomedical of Canada acquired by Glaxo.
Mergers and acquisitions in the telecom sector in 2005
France Telecom acquired Spain’s Amena.
AT&T acquired by SBC.
Western Wireless acquired by Alltel.
Midwest Wireless acquired by Alltel.
Telesim of Turkey acquired by Vodafone.
Marconi of UK acquired by Ericsson.
Mergers and acquisitions in the travel and transport sectors in 2005
Hilton Group acquired by Hilton Hotels.
Merger of Air West and US Airways
USF acquired by Yellow Roadway.
Acquisition of Britain’s P&O by Dubai Ports.
Last Updated on : 29th July 2013