Tech giants spend big to stay on top

Singapore

IN THIS rapidly evolving age of digital advancement and disruption, changes to the technology sector have ranked among the most momentous in recent times.

So it should come as no surprise that technology companies have spent hundreds of billions of dollars in the last few decades to stay atop those crests of change.

But what have been some of the most significant acquisitions by tech companies in recent years? Which have been some of the world's most enterprising CEOs for such acquisitions? And who has been spending the most?

These are some of the questions answered in a report titled "Acquisitive Tech", published by global online trading and investments provider, IG.

The report analysed acquisition records of the world's top 10 tech companies from 1991, the year the Internet first became publicly available. The exception was for the companies founded post-1991 - Amazon (1994), Google (1996) and Facebook (2004).

It found that, despite its relatively short lifespan, search engine Google has made the most number of acquisitions - 214 - compared to other tech giants.

It also made these purchases most frequently, averaging out at some 10 or 11 acquisitions a year.

Despite the large and frequent number of acquisitions, however, Google has not been the biggest spender; that honour goes to American multinational technology conglomerate Cisco Systems, which has shelled out some US$83 billion in 193 publicly disclosed acquisitions since 1991.

Google's deals have been relatively smaller; its total spend was just US$30.7 billion.

In terms of the amount spent, Cisco is followed by American multinational information technology company Hewlett-Packard (HP), which has spent US$64.1 billion on 117 acquisitions (which puts it in fifth place in terms of the number of acquisitions).

Bill Gates' Microsoft Corporation comes in third, having spent a total US$61.4 billion on publicly announced deals. Microsoft also made the third-largest number of acquisitions after Google and Cisco, with 189 publicly known acquisitions since 1991.

Apple and Sony appear the most prudent of the lot, spending just US$7.1 billion each in publicly disclosed acquisitions. Apple is, however, in sixth place in terms of number of acquisitions, with 89; Sony ranks 10th as well in this field, with 47.

The most significant acquisition among this lot, as reported in IG's research, was Microsoft's US$26.2-billion purchase of social networking site LinkedIn in 2016. Up until then, Microsoft had not been a significant player in open-ended social networking, while LinkedIn was the largest social networking site focused on the working world.

The Microsoft-LinkedIn deal is followed by the merger of HP and computer company Compaq in 2002, in a deal worth US$25 billion. At the time, the transaction generated almost universal scepticism and cynicism, but has since been lauded as one of the more successful mega deals in recent history.

In third place is social networking site Facebook's purchase of messaging service WhatsApp in 2014 for US$19 billion. Mismatched ideologies between the two companies, however, eventually led to WhatsApp co-founders Brian Acton and Jan Koum walking away from the merged entity.

As for the tech CEOs who oversaw the most number of acquisitions, IG's report put Cisco CEO John Chambers at the top of the list, being party to 172 acquisitions during his 20-year watch from 1995 to 2015.

IBM chief Samuel J Palmisano is in second place, having overseen 105 acquisitions by the company between 2002 and 2012. Google's Larry Page is a close third, with 102 deals.

The full report can be found at: https://www.ig.com/uk/cfd-trading/research/acquisitive-tech.