We’ve seen some giant companies throughout history, many of which have actually been broken by the regulators in the country for being monopolies. For example, Standard Oil was the biggest company in the world by far at the time, but actually had a monopoly on the oil industry, which itself is one of the biggest and very lucrative industries in the world. This is why the owner of Standard Oil, John D. Rockefeller, is still the richest man to have ever existed in modern times. Adjusted for inflation, his net worth is said to be around $350 billion to $420 billion, which means that the current richest men in the world, Elon Musk and Jeff Bezos, with the former currently worth over $200 billion, have to do a lot more to catch up. Of course, the way Tesla and Amazon’s value grew significantly in a year which absolutely wrecked the global economy due to the Covid-19 pandemic, the sky seems to be the limit and in a few years (or not even that), we could see these two men eclipse the wealth that John D. Rockefeller amassed more than a century ago.
While Tesla and Amazon may have grown significantly and are now counted among the most valuable companies in the world, the current most valuable company in the world is Apple, with a market cap of more than $2.237 trillion, which is more than the GDP of the vast majority of the nations in the world. And while these companies may have mostly grown organically, that is not true for most of the companies that are ranked among the biggest in their industry.
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Companies grow through two ways; organically or through mergers and acquisitions. Growing organically means that the company slowly and steadily increases its sales and its market share, which doesn’t happen in a day. It takes years and even decades to grown organically, and many companies don’t take that route. Instead, many companies go through the rate of mergers and acquisitions. Now, there is a difference between the two, but in a sense, both require the purchase of shares of a company. Now, the reason most companies do this is to gain more dominance within the industry, and the most popular reason for mergers and acquisitions is synergies. Synergy is a term used to describe that the sum of the parts is worth more than the individual parts. By combining the resources of two or more companies, the expectation is that it will bring more benefits to the company than just the additional sales or market share. However, as many examples throughout history have proven, the idea of synergies is easier to imagine than to translate it into reality. In fact, according to a report by Harvard Business Review, most mergers and acquisitions fail, with the failure rate being between 70% to 90%.
One of the reasons behind these failures is the fact that there are a lot of clashes between the two companies being merged. Often, the companies have different corporate views, different goals, different cultures and different ways of working, and integrating two companies under a single banner is easier said than done. Despite this, when its successful, it can often be worth it, which is why companies often spend tens of billions, if not hundreds of billions of dollars on such deals. Below, we have a list of such companies, ranked according to the value of the deal, adjusted for inflation. So without further ado, let’s take a look at the biggest deals ever made in history, starting with number 15:
15. Bell Atlantic purchasing Vodafone AirTouch
In 1999, Vodafone merged its wireless with Bell Atlantic, just some time before Bell Atlantic merged with GTE to form Verizon (NYSE:VZ). Vodafone is the only company to have two entries in our list of the biggest acquisitions of all time.
Total purchase price (in billions of dollars): 70
Total purchases price adjusted for inflation (in billions of dollars): 107
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14. Merger of Citicorp and Travelers Groups (NYSE:TRV)
Total purchase price (in billions of dollars): 70
Total purchases price adjusted for inflation (in billions of dollars): 110
The owner of Citigroup (NYSE:C), in 1998, CitiCorp purchased Travelers Groups, which is an American insurance company. Citigroup is one of the largest banks in the entire world.
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13. Merger of Glaxo Wellcome and SmithKline Beecham
Total purchase price (in billions of dollars): 76
Total purchases price adjusted for inflation (in billions of dollars): 113
GSK (NYSE:GSK) is now one of the biggest biotech companies in the world, and has annual revenues of more than $40 billion. The merger took place in 2000, with the company being renamed GlaxoSmithKline and is also in the history books for receiving the highest fine in pharma history.
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12. Merger of Exxon and Mobil
Total purchase price (in billions of dollars): 77.2
Total purchases price adjusted for inflation (in billions of dollars): 121
Exxon Mobil (NYSE:XOM) is now one of the biggest oil companies in the world. The merger between Exxon and Mobil, which took place in 1998, resulted in the formation of the largest oil company in the world.
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11. Purchase of ABN Amro Bank by RFS Holdings
Total purchase price (in billions of dollars): 98
Total purchases price adjusted for inflation (in billions of dollars): 121
ABN Amro Bank is one of the largest Dutch banks, and regularly featuring in the top 3 for the country. The bank has actually been part of major mergers and acquisitions throughout history, with such history being traced back to at least 1795, more than 220 years ago. In 2007, it was purchased by RFS Holdings, which at the time was the biggest bank acquisition in history.
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10. Merger of China Power Investment and State Nuclear Power Technology
Total purchase price (in billions of dollars): 112.6
Total purchases price adjusted for inflation (in billions of dollars): 121
One of the biggest mergers and acquisitions of all time is the merger between State Nuclear Power Technology and China Power Investment, which was approved by the Chinese government. This resulted in the creation of China Power New Energy Development Company Limited which would be trying to increase the exports of nuclear technology through the company.
Pixabay/Public Domain
9. Merger of ChemChina and Sinochem
Total purchase price (in billions of dollars): 120
Total purchases price adjusted for inflation (in billions of dollars): 122
ChemChina is one of the biggest chemical companies in the world, and is state-owned. In February 2016, the company acquired Syngenta, the Swiss company. This was the biggest foreign acquisition by China and the only Chinese merger and acquisition in our list which is related to a Chinese company acquiring a foreign company.
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8. Merger of Royal Dutch Petroleum and Shell Transport and Trading Company
Total purchase price (in billions of dollars): 95
Total purchases price adjusted for inflation (in billions of dollars): 129
Shell (NYSE:RDS) may be one of the biggest multinational companies in the world, and among the top 5 in terms of revenue, but it went through a sticky patch in 2004. Two companies were combined to create Royal Dutch Shell, which was done to improve management, which was blamed for a crisis which resulted in the company overstating oil reserves.
7. Merger of Gaz de France and Suez
Total purchase price (in billions of dollars): 107
Total purchases price adjusted for inflation (in billions of dollars): 132
In 2007, Gaz de France merged with Suez, which resulted in the formation of one of the biggest electric companies in the world, Engie. It is one of the few companies in the industry to develop proper expertise in both upstream as well as downstream activities. The company had revenues of more than 60 billion euros while the net income was 1 billion euros. The company also currently employs more than 171,000 people and a fourth of the company is owned by the government of France.
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6. Pfizer purchase of Warner-Lambert
Total purchase price (in billions of dollars): 90
Total purchases price adjusted for inflation (in billions of dollars): 138
Pfizer (NYSE:PFE) is not just the biggest biotech company in the United States, but is the biggest biotech company in the entire world. Pfizer has recently been in the news over the past year for being the first company to develop a workable vaccine for the Covid-19 pandemic, which has been hailed by everyone. The company purchased Warner-Lambert in 2000 along with all of its subsidiary companies as well.
5. Merger of China Sinograin with China National Cotton Reserves Corp.
Total purchase price (in billions of dollars): 213
Total purchases price adjusted for inflation (in billions of dollars): 222
China undertook a drive in the late 2010s to reduce the number of state owned enterprises to under 100, which resulted in the 2017 merger of China Sinograin with China National Cotton Reserves Corp.
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4. China Minmetals purchase of China Metallurgical Group
Total purchase price (in billions of dollars): 245.6
Total purchases price adjusted for inflation (in billions of dollars): 265
China Minmetals is one of the biggest metals and minerals trading company in the world, and the company handles at least 12 million tonnes of steel products every single year. The company, like most major companies in China, is owned by the state and in 2015, it acquired China Metallurgical Group, which was an engineering and mining group, as part of China’s attempt to overhaul the metal industry of the state.
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3. AOL merger with Time Warner
Total purchase price (in billions of dollars): 182
Total purchases price adjusted for inflation (in billions of dollars): 270
Ah, the ill-fated purchase of Time Warner by AOL, which is the poster child of disastrous acquisitions and short-term strategy thinking. AOL purchased Time Warner, even though Time Warner had way more assets as well as revenues. The thinking behind this strategy was that Time Warner would be able to become part of the digital revolution and the acquisition will allow Time Warner to rocket forward and beat its competitors. As history shows, things didn’t quite work out that way. In 2002, AOL Time Warner posted a loss of $99 billion, which was the biggest loss in history at the time, and the company didn’t last long, being renamed Warner Media by 2003. Even now, the $99 billion loss is still one of the biggest losses ever made by any company in the world. Warner Media is currently owned by the biggest telecommunications company in the world, AT&T (NYSE:T)
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2. Vodafone Airtouch (NASDAQ:VOD) purchase of Mannesmann
Total purchase price (in billions of dollars): 183
Total purchases price adjusted for inflation (in billions of dollars): 281
Vodafone is a British telecommunications industry, which is one of the biggest in the world. The company has operations in several continents including Europe, Asia, Oceania and Africa. It is listed on the London Stock Exchange as well as the New York Stock Exchange, and has operations in 22 countries. In 1999, the company purchased German conglomerate Mannesmann, which was a major German conglomerate. The move allowed Vodafone to grow very quickly.
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1. Merger of Shenhua Group with China Guodian Corporation
Total purchase price (in billions of dollars): 278
Total purchases price adjusted for inflation (in billions of dollars): 290
Topping the list of the 5 biggest acquisitions in history is the merger of Shenhua Group with China Guodian Corporation. The restructuring was announced by the state in 2017, and is even now the biggest acquisition in history. China Guodian Corporation was absorbed by Shenhua Group as part of the restructuring, which also resulted in the company being renamed as China Energy Investment Corporation, which is one of the biggest mining and energy companies in China. The company is completely owned by the Chinese government,
See also: 11 Worst Tech Mergers and Acquisitions Ever and 10 biggest tech acquisitions in history
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This article is originally published at Insider Monkey.