Acquisition Examples

Introduction to Acquisition

The examples of the Acquisition provide an idea to the user about different types of acquisition that took place. An acquisition of one company by the other company takes place when one of the companies purchases mostly all of the shares of the other company for attaining the synergy benefits and gaining the control of other companies. There are multiple reasons because of which the company decides to acquire another company. There is well though reason by the companies for this move. In the past, there are various companies and areas where the acquisition took place. It is not possible to provide an example of each and every type of Acquisition. The following example of the acquisition has been provided to give an idea about some companies where the acquisition took place with the other details:

Examples of Company Acquisition

Acquisition examples are as follows:

Example 1 – Acquisition of the Company Ranbaxy by the Sun Pharmaceuticals:

The deal took started when the sun Pharmaceuticals declared that it is going to acquire the company Ranbaxy and the deal got completed after that. The company got the approval of the acquisition from different authorities. This example of the acquisition is the classical example of the share swap deal where it was decided that the shareholders of the Ranbaxy will get the four shares of the Sun Pharma Company for the five shares they are holding in Ranbaxy i.e. 4 shares of Sun Pharma for 5 shares in Ranbaxy. This deal leads to the dilution of the 16.4 % equity capital of the Sun Pharma.

The sun Pharma was interested in this acquisition because as per the Sun Pharma this deal of acquiring Ranbaxy will help the company in getting better access to the emerging markets in the economy and to strengthen Sun Pharma’s presence in the domestic market as well. After the merger, Sun Pharma can enter into the new markets by the way of filling the gaps in offerings of the company with the help of the acquired company

With the help of the acquisition, it will also come to the first position as a generic company in dermatology space which before acquisition it was not holding as before that it was on the third position in the US market as a generic company in dermatology. The merger will help in boosting the products offered by the Sun Pharma as it will create more visibility and the market share in the pharmaceutical industry

From the perspective of the Ranbaxy also, the acquisition lead to the turnaround of the distressed business

Example 2 – Acquisition of the Company Whole Foods by the Amazon

In the year 2017, Amazon, the e-commerce announced that it is going to buy a high-end organic chain of grocery named Whole Foods for the amount of $ 13.7 billion or $ 42 per share. The deal was done officially by the end of August 2017. The whole food is a leader in the US for the distribution of natural and organic food products.

The acquisition by the Amazon of Whole Foods makes it possible for combining two of the leading brands, both focusing on the customer-centered approach. This will allow Amazon to expand the multichannel offering of its company and further enhance the customer experience in the market. Amazon was interested in this acquisition because it was seen that the potential for the development of the whole foods was enormous. Initially, it was present mainly in the U.S. only at the time of the acquisition, but the same concept prevailing in the US market could be extended in other countries as well on the same lines. Also, management of the Amazon knew that the 33% of the annual sales of the company are done in the fourth quarter of the calendar year only, so with the help of the diversification into the food industry would help in smoothing out the cash flows and meet out with this seasonality issue.

Thus the acquisition was towards the rocky start which gave Amazon hundreds of the physical stores along with providing a strong entryway into competitive food and grocery industry.

Example 3 – Acquisition of the Shazam by the Apple

Apple in the year 2017 confirmed the acquisition of Shazam for the amount of $ 400 million by it.

Shazam is a well-known company among the customers that lets users identify the songs, TV shows, commercials, and movies from the short audio clips.

Apple was interested in the acquisition because, with the help of acquisition, it would be able to avail the services of Shazam to boost the Apple Music. At the time of the acquisition, Shazam has a serious user base and the app was downloaded by more than 1 billion times. Its users were also very loyal, so with the help of acquisition, Apple can get more of the paying customers for its own services like apple music. Also, Shazam was a profitable company and generates huge revenue through the advertisements, so it makes sense for Apple to invest in the software brand which already has the recurring amount of revenue and loyal users in some different countries of the world.

Conclusion – Acquisition Example

An acquisition takes place when one of the company purchases mostly all of the shares of the other company for gaining the control of other companies. Purchasing the target company’s shares and other assets by more than 50% allows the acquirer to take the decisions of the acquired company without the approval of the company’s shareholders. The acquisition is considered to be a critical component and an important change agent of any strategy of the business. The fact is that with the businesses evolving, the survival will be only of most innovative companies and because of this it is one of the important strategic decisions for any business to go for the arrangement of the acquisition. There is always a synergy value that is created by the acquisition of one company by another. There could be an area where the synergy can be seen, be it increase in revenue, decrease in revenue or the reduction in the overall cost of the capital.

The above example of Acquisition highlights the different types of acquisition that took in the past. Every acquisition has its own different reason. The company goes for the acquisition in case if it finds it to be beneficial.

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