With the constant evolution of strategies, marketplaces, and competition, the mergers & acquisitions world is often unpredictable. With 2018 up and running, we took a look at some of the major M&A predictions for 2017 to see what was predicted and what ended up happening.
What was predicted: Comcast would buy T-Mobile.
What really happened: A devaluation of T-Mobile – noted in a report by Deutsche Bank analyst Matthew Niknam – has occurred. This was followed by a drastic change to Comcast’s mobile strategy involving unlimited-data plans, announced late 2016. Niknam states that the newly unveiled mobile strategy has “limited the incremental upside from potential M&A scenarios.”
What was predicted: Netflix would flicker and be bought by Apple, Google or Disney.
What really happened: With a market value of $81 billion as of December 2017, Netflix continues to remain independent. In a turn of events, Netflix switched from a potential target to a developing acquirer, buying Millarworld on August 7, 2017, a comic book company best known for publishing books such as Kingsman, Old Man Logan, and War Heroes.
Barnes & Noble
What was predicted: Amazon would buy Barnes & Nobles.
What really happened: Despite Amazon’s stringent competitive strategies, Barnes & Noble has lived another year as a sole entity. Amazon, however, continues to remain competitively superior – Amazon Books has replaced Barnes & Noble’s prominent three-story location in Bethesda, Maryland, marking 13 operating stores across the US, while Barnes & Noble stores continue to close.
What was predicted: Slack would sell out and be acquired by IBM, Cisco, Oracle or Salesforce.
What really happened: Conversely to Fortune’s predictions, Slack continues to ride solo as of December 2017. While no formal offers were established, Slack still has a large number of potential acquirers, including Amazon, whose potential decision to acquire would align with their strategy to compete with Microsoft Office and Google G Suite. Both Google and Microsoft may also want a piece of the pie due to Slack’s functional similarities to Google Hangouts and Microsoft Teams, respectively. Salesforce is also a potential bidder, whose recent acquisition of Quip reflects their strategic imperative to compete with Microsoft.
What was predicted: Under Armour would merge with Lululemon.
What really happened: What was originally imagined to be a perfect partnership has fallen flat due to an inter-organizational conflict – in mid-2017, Lululemon sued Under Armour for copying a sports bra design, destroying all hopes of a strategic merger. Additionally, Under Armour has recently suffered a personnel shake-up—the co-founders, Chief Marketing Officer, and division heads have left the company, forcing senior staff to focus on improving the strength of their executive team instead of strategic M&A possibilities.
Hewlett Packard Enterprise (HPE)
What was predicted: HPE would be acquired by a private equity firm.
What really happened: Fortune’s single, slightly-accurate prediction – HPE merged with Computer Sciences Corporation on April 3, 2017, amalgamated as DXC Technology. DXC’s Celeriti suite – which incorporates many technological advances such as Cloud Computing, Data Analytics and Web 2.0 technologies – has drawn the attention of many Australian banks looking to upgrade their core banking system. Westpac – one of Australia’s leading financial service providers – has already completed this move to Celeriti’s cloud-based model, driven by potentially significant cost savings.
What was predicted: Simon Property would acquire Sears.
What really happened: While no acquisition or merger has occurred thus far, a potential acquisition is still in the playing field due to the joint venture that occurred between the two companies in 2015, a move which aimed to bring Sears out of financial instability.
It’s a new year, and with it comes brand new sets of predictions in the M&A world. Some of the stories we covered here are by no means complete. To create real-time alerts on all these companies, and to stay up-to-date on all things M&A, start your free 30-day trial of RelSci News & Alerts.