Japanese 7-Eleven products have been brought to the U.S. As 7-Eleven CEO Ryuichi Isaka stated, the decision was to “change (their) business model from one that relies on gasoline and cigarettes to one in which customers choose us based on (their) products.”
globalEDGE Blog - By Tag: mergers-and-acquisitions
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Twitter is a United States-based company that is the 7th most popular social media worldwide and the 9th most visited website globally in 2021. However, throughout 2022, Twitter and Elon Musk, a well-known multi-billionaire for his Tesla and SpaceX companies, have had an on-and-off acquisition deal for Twitter. This deal’s repercussions could change how businesses can effectively digitally advertise their products on the platform.
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The European Union has recently decided to expand its regulation into U.S. companies that interact with European countries. The most recent example is the blockage of the merging between American company Illumina Inc. and European company Grail Inc. Grail’s technology aims to help detect cancer early through blood testing, which Illumina was looking to accelerate as a leading competitor in genetic variation and function technologies. The blocking of this $7.1 billion acquisition demonstrates the emphasis the EU is putting on extending its power.
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In the first eight months of 2021, global M&A activity has grossed $3.6 trillion, the highest mark at this point in the year since at least 1995, when Dealogic started keeping records. This unprecedented volume of activity has been aided by low interest rates, soaring stock prices, and executives’ ability to address the imperfections in their business exposed by the pandemic. The U.S. alone accounted for $2.14 trillion worth of M&A deals this year, while Europe and the Asia-Pacific accounted for $657 billion and $620 billion, respectively. This wave of deal-making has Wall Street setting records as well, as deal advisory revenue has reached new heights for multiple investment banks. It’s no surprise that Goldman Sachs is the best performing stock in the Dow this year, up 56%.
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While many businesses have suffered due to the impacts of the COVID-19 pandemic, some industries have seen extraordinary growth. With legislation limiting or preventing the ability of restaurants to host guests, the demand for take-out and delivery options has risen dramatically. The food-delivery industry experienced record levels of growth throughout 2020. The top four companies accumulated around $5.5 billion dollars in revenue in the seven months following the beginning of the first lockdowns. This dwarfed the $2.5 billion dollars of revenue from one year prior over the same period.
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As speculated for weeks, Salesforce recently finished the acquisition of the popular messaging app, Slack. The total cost of this purchase is $27.7 billion. This acquisition unites a giant in business software with a newcomer with the mission to replace office emailing. As of Wednesday, November 25, 2020, Slack Technologies had a value of $17 billion and a decreasing stock of -1.81%.
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In the United States, approximately 257.3 million people own and use a cell phone. Zoom out to the world as a whole and that number increases to 4.57 billion people. In both cases, the statistics are only expected to show increases as global income rises, interconnectedness becomes normalized across land and sea, and technology continues to advance at a rapid clip. Recently, the cell phone market in the U.S. made news when T-Mobile’s merger with Sprint was approved by a federal judge on February 11th, uniting the third and fourth largest players in the U.S. industry, respectively.
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Companies often seek growth opportunities by acquiring a company or merging with one either within its borders or internationally. Successful M&As (mergers and acquisitions) have proven to be one of the most effective ways to increase a company’s sales and/or profitability. It is also a method to push competitors outside the picture and take a larger part of the pie. M&A’s face a long list of challenges when it comes to M&A, but one of the most significant obstacles companies face in the pre-deal stage is government intervention.
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This is the first post in a five-part blog series focused on the consumer products industry.
This month’s blog series will provide an overview of the consumer product industry and its future outlook, and then we will analyze the industry by region: North America, South America, Asia, and Europe. By the end of this week, these blogs will offer you a thorough summary of what’s happening in the consumer product industry and emphasize the importance of the industry in the global market.
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2017 was a busy year for the food industry with many mergers and acquisitions taking place, and this is expected to continue into 2018. According to the Food Institute data, 587 companies completed mergers and acquisitions last year. This is a considerable increase from the 505 mergers and acquisitions from 2016 and the 410 from 2015. In the United States, the food industry completed deals worth a total of $42 billion throughout 2017, up from the $27.1 billion in deals from 2016. Mergers and acquisitions have been taking place in all sectors of the food and beverage industry, with the largest being the sale of Whole Foods to Amazon for $13.7 billion. Along with Amazon, other large companies have also been expanding into the food distribution industry, including Walmart and Target. Other examples of recent mergers and acquisitions include the sale of Snyder’s Lance Inc. to Campbell Soup and the sale of Nestlé’s US confectionary business to Ferrero.
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Valeant Pharmaceuticals International Inc., a corporation based in Quebec, is currently in talks to sell Salix Pharmaceuticals Ltd., a company that manufactures gastrointestinal drugs. Valeant originally acquired Salix in March 2015 for $14.5 billion. The purchase was part of a growth strategy of buying pharmaceutical businesses with reputable products and cutting their research costs to maximize profits. However, Valeant lost much stock value over the past year due to unethical business activities, including price hikes, unreliable accounting, and secret collusion. Recently, the company undertook major efforts to change its leadership, settle its legal suits, pay off its debts, and re-establish growth. Selling Salix could be instrumental to these plans; just this week, news of the potential sale increased Valeant's stock by 34%. While prospective clients have been mostly kept anonymous, Japan's Takeda Phamaceutical Co. Ltd. has expressed public interest.
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Alas! After months of waiting and a volatile year in the global markets, the Federal Reserve announced Wednesday that it will be increasing rates from close to zero to between 0.25% and 0.5%. This is the first interest rate rise in almost a decade, and the effects of the increase will spark volatility in domestic markets as well as international markets. The rate hike is meant to signal economic strength in the United States by showing that the economy is strong enough to handle larger borrowing costs. Janet Yellen, the Federal Reserve chair, explained that further rate hikes will be “gradual” in an effort not to slow economic recovery.
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2015 has been a huge year for mergers and acquisitions, with current projections predicting the total value for the year will be the highest since pre-recession levels. Well-known industry leaders such AbbVie and Pharmacyclics, Royal Dutch Shell and BG Group, and Kraft and Heinz have all announced mergers this year, creating huge international corporations to compete in the global market. Several sectors have seen a large share of the activity, one being the technology industry, especially in the electronics and semiconductor area. The semiconductor industry is the backbone of the technological industry, producing the chips used in computers, cell phones, and appliances.