Modern trends in M&A largely revolve around the acquisition of up-and-coming firms to enable technological advantage and global competencies for larger firms.
Observe the current trends in strategic alliance, primarily those revolving around technology acquisition
Currently, higher technologies and pharmaceuticals are huge influential arenas for modern strategic alliances, most notably acquisition by large organizations.
Mergers and acquisitions became prominent in the late 19th century, and have evolved significantly in scale and focus until the modern day.
Companies such as Apple, Google, Facebook, IBM, and Microsoft are critical focal points for understanding modern acquisitions, as they have acquired hundreds of organizations for hundreds of billions of dollars.
Modern mergers and acquisitions are valuable in providing key competitive advantages in upcoming technological arenas as well as accessing global markets.
Mergers and acquisitions (M&A) are a significant aspect of modern strategy, particularly in the technology and pharmaceutical arenas. The reasoning behind M&A's can vary, ranging from deriving competitive advantages to economies of scale, economies of scope, international expansion, vertical integration, access to unique assets, and perhaps most common today for the acquisition of valuable intellectual property (IP).
Past and Present M&A's
To understand modern trends in M&A's, it's useful to understand the trajectory of this particular strategic alliance approach. Over time, acquisitions have moved through a number of 'waves' from a strategy point of view, most recently in order to pursue globalization.
Today, the list of recent acquisitions is expanding rapidly. Companies such as Google, Apple, Amazon, Microsoft, and IBM are acquiring new technology companies and platforms rapidly and competitively. The mergers and acquisitions by these five companies alone represents the acquisition of hundreds of business and hundreds of billions of dollars. These moves are an absolutely critical source of competitive advantage from technological, economic, and expansionary perspectives.
Recent High Impact Acquisitions
Let's look at a few of the largest, most recent acquisitions from some of these influential companies to appreciate the scope and frequency of modern acquisition strategies.
Facebook - Facebook acquired WhatsApp in 2014 for $19 billion, propelling Facebook further into the domain of mobile messaging. Shortly after they acquired Oculur VR, a virtual reality technology company. They also acquired Surreal Vision and Pebbles in 2015, both computer vision and augmented reality companies.
Microsoft - Since 1987, Wikipedia lists a total of 197 acquisitions for Microsoft. One particularly notable recent acquisition for Microsoft was that of Nokia for a total of $7.2 billion in 2013. Mojang, a video game developer best known for Minecraft, was acquired by Microsoft in 2014 for a total of $2.5 billion. Other notable acquisitions include forays into education software, music discovery, video streaming, big data analytics, data protection, and mobile communications.
IBM - IBM is an enormous organization with acquisitions ranging from software storage and management, streaming video, cyber security, salesforce systems, mobile APIs, healthcare, cloud security and capabilities, behavioral marketing, cognitive computing, and an incredibly wide range of other technical abilities.
Apple - Apple recently spent $200 million to acquire Turi, a machine learning company. They also demonstrate interest in facial recognition with Emotient, augmented reality with Metaio, music analytics with Semetric, education software with LearnSprout, personal health info collection with Gliimpse, and a variety of other industries and segments.
The race for new technological advantages through acquisition is dynamic, and the definition of the modern trend in strategic alliances is definitely along the lines of technological acquisition.