The Boston Consulting Group outlines the nine trends in technology M & A. The three most critical trends are the core technologies needed for digital transformation such as Industry 4.0, cloud computing and cloud computing solutions, mobile technologies and software vendors, etc. In the digital transformation process , The newly emerging artificial intelligence, financial technology, demand for IoT, data analysis and the world's active capital continue to drive the M & A. The consulting firm believes that technology for new and new markets will still be seen by 2018 Mergers and acquisitions continued, including mergers and acquisitions backed by state funds in mainland China, of which two-thirds were cross-border mergers and acquisitions, concentrated in North America and Europe (including Sinochem's $ 44 billion acquisition of Syngenta); private equity funds PE); the proportion of technology M & A driven by the demand for digital transformation increased significantly.
According to Bloomberg data, global technology M & A transactions for the year ended November 24 amounted to US $ 312.9 billion, a slight decline of 5.4% over the same period of last year. However, this category did not count as a communication category. For example, Alphabet bought the HTC mobile phone unit is Were classified as communications, 29.9% more than in the same period of last year if they were included in communications. The global communications industry has so far acquired a total of $ 569.8 billion in assets in 2017, up 50.5% over the same period of last year.
Mergers and acquisitions in the field of artificial intelligence are particularly prominent in 2017, as of December 2017, the global mergers and acquisitions completed AI field reached as high as 21.3 billion US dollars, more than 26 transactions more than in 2015. Full of expectations, hype and fierce competition Of the AI field, just as the vigorous boom of the California gold rush that year is expected to continue into 2018.
Source: Economist
2018 Trend of M & A in Science and Technology
So, the global M & A prospects and trends in 2018 can be said that digital transformation is one of the core drivers.According to Deloitte's survey of more than 1,000 business and private equity fund managers, surveyed U.S. companies and private equity funds were 68% And 76% expect that M & A transactions will continue to grow in 2018 and 63% believe the transaction will increase in size and 34% are expected to be flat.
Motivation behind the mergers and acquisitions shows that in addition to 20% for technology acquisition, 19% is for market share expansion, 16% for diversification of products or services, 12% for digital strategy, and 9% Is to obtain the necessary talent.Among them, the 'digital strategy' is only appeared in 2017 the answer, but it has become the manager of the M & A in the eyes of the fourth important reason; 'access to talent' accounted for the proportion of the previous 4% of the year more than doubled.
In terms of risk, Deloitte summarizes the four risks that may affect mergers and acquisitions, including global economic uncertainty (20% but 6% lower than last year), capital market volatility (17% -4% lower than last year) , The transaction was overvalued (15%, 1% lower), and the possible postponement of the relevant laws and regulations on core business (13%, down 6% from the previous year).
In the areas of mergers and acquisitions, Deloitte pointed out that companies are interested in M & A in machine learning, robotics, artificial intelligence and advanced data analysis, and have a huge appetite. The transaction amount is expected to continue to grow in 2018. In addition, Smaller technology companies achieve strategic goals or integrate new technologies with their core businesses to achieve significant digital transformation benefits. In areas such as artificial intelligence, deep learning, machine learning, data analytics, FinTech, Internet of Things, Chain and other new technologies will determine the future competitiveness At this time, mergers and acquisitions has become a lack of these new technology capabilities enterprises can not make good use of the weapon, if missed the opportunity in the highly competitive future game I am afraid to be more disadvantaged.
According to DIGITIMES 'observation, in addition to the massive acquisition of artificial intelligence companies in the United States and Europe, as well as the automation and IOT technology enterprises related to Industry 4.0, the mainland has also actively entered the Southeast Asian market with a population of 600 million through acquisitions since 2017. In the face of Europe and the United States After the block-up of the M & A filing system, which won state funding, was blocked, the mainland's capital gradually turned to Israel for actively seeking technology-related targets for autonomous driving and electric vehicles.
DIGITIMES stressed that in the Asia-Pacific region, the volume of M & A transactions surged 101% annually, with India up 320% to US $ 10.3 billion and Indonesia surging 159.1% to US $ 1.5 billion. The mergers and acquisitions, which lock the two emerging markets, , Video games and e-business unicorns mainly from mainland technology giants such as Alibaba, Tencent, Baidu, Jingdong a lot of money.In addition, Japan and South Korea-based advanced Asian countries mergers and acquisitions to create a 548.5% Jumped to 27.1 billion US dollars, mainly driven by the sale of Toshiba Semiconductor and PC sector.
Observing the trend of China's M & A, Baker McKenzie's global trade outlook report predicts mergers and acquisitions in mainland China will rebound in 2018. Among them, as China simplifies relevant laws to further attract foreign investment, M & A deals Which is expected to increase by 73% from US $ 28.1 billion in 2017 to US $ 47.9 billion in 2019. In 2019, the transaction volume in the M & A market in mainland China is expected to reach 297.1 billion U.S. dollars with a transaction volume of 2003 cases.
From an industry perspective, healthcare, pharmaceuticals and consumption will gradually become important areas for M & As as the service and consumer spending increasingly become the driving force behind China's economic development.With the upgrading of the manufacturing value chain, high value-added manufacturing Industry-related areas will continue to attract investment, while supporting industries such as communications and technology will also be the favored places for investment. On the other hand, with the transformation of China's economy and the development of science and technology innovation, it is expected that information technology, Healthcare, high-end manufacturing and other industries will continue to be the focus of overseas acquisitions by Chinese enterprises.
Technology M & A transactions really successful it?
Does such a massive volume of technology M & A really add value or benefit businesses? According to data from Boston Consulting, these M & A deals are actually 50 to 50 gambling games, with about half of deals involving technology goals (51% ), Resulting in a positive cumulative anomaly, which benefits. The consulting firm pointed out that the successful mergers and acquisitions need to consider two factors, on the one hand is a strategic element, there is a big risk M & A, the acquirer must be careful to choose their own goals, Billions of dollars of trading may be full of risk, so investors must be cautious, with the lowest risk carefully into the new areas, gradually being acquired company into their own, for their own use.On the other hand, in the long run Consider the experience In the short run, the first acquisitions or single mergers to create higher profits than the mergers and acquisitions firms, but a year later, we found that the completion of a series of M & A companies is the largest Earnings, because these companies are more experienced in resources, execution, mergers and acquisitions integration.
Deloitte statistics found that in many aspects of overseas M & A transactions, mergers and acquisitions and M & A targets search and screening, integration planning and implementation, valuation and transaction negotiations are the main pain points facing enterprises in the implementation of due diligence, mergers and acquisitions strategy formulation And mergers and acquisitions the subject of search and screening and valuation, as well as the three aspects of the transaction negotiations.After the merger and acquisition of the main challenges of integration with enterprise development has integrated strategy, agreed with the management objectives and access to appropriate resources to develop practical projects Plan and strictly enforce.
'The clever takeover pays attention to every detail of its own M & A goals, including its strategy, its processes, and its team composition so that the acquirer can complete the M & A with minimal risk and enable the business to further develop,' said the Boston Consulting Group.