Five biggest corporate deals of all time

As Vodafone nears its $130bn Verizon deal, we take a look at the biggest business deals of all time

Advertising giants Omnicom and Publicis’ announcement of a $35bn (£22.7bn) mega-merger in July was widely regarded the deal of the year, or at least until news of Vodafone’s big stake sell-off broke last week.

The telecom giant is planning to sell its 45% stake in Verizon Wireless for $130bn (£84bn) to Verizon Communications.

The merger is, of course, a big deal but it doesn’t come close to some of the biggest deals in corporate history. Which ones are they? Take a look:

1. Vodafone snaps up Mannesmann for 166.6 euros ($171.9bn) in 1999

In 2000, German conglomerate Mannesmann AG was snapped up by Vodafone for 166.6bn euros ($171.9bn), making it the biggest deal in corporate history. The deal created the world’s largest mobile-phone operator, with 42.3 million customers across the world, at the time of purchase. This was the first time a big German firm was sold to a foreign owner.

2. Vodafone sells Verizon stake for $130bn

In what was the second-biggest business deal ever and the biggest deal of the year, Vodafone sold its 45% stake in Verizon Wireless to US telecoms group Verizon Communications. BBC business editor Robert Preston reported that Vodafone will avoid tax on the sale as the stake, in question, is in a US group whose holding company is in the Netherlands. MPs were up in arms about the phone company not paying any UK tax on profits.

Margaret Hodge, chairman of the Public Accounts Committee, said: “I don’t understand how anyone can justify such a massive windfall without handing any of it to the Exchequer.

“If this is an instance in which Vodafone has simply played the system then clearly they themselves have an obligation to UK consumers, on whom they depend for their business, to do the right thing.”

3.  AOL’s acquisition of Time Warner for $112.10bn in 2000

This deal was heralded at the “deal of the millennium” but the dotcom bubble burst soon after and made it one of the worst corporate deals in history. Why? Well, AOL posted a $98.7bn loss in 2002, one of the largest reported losses in US corporate history. Result? The two companies de-merged in 2009.

4. Pfizer’s purchase of Warner-Lambert for $111.7bn in 1999

The two American pharmaceutical companies merged to create the world’s second-largest drugs company. The combined company kept Pfizer’s name and its New York headquarters. The deal meant that another pharamceutical giant American Home Products (now Wyeth), which had planned to merge with Warner-Lambert, had been dumped for the third time. Then in 2009, Pfizer acquired Wyeth for $68bn.

5. Altria shareholders spin off Philip Morris for $111.2bn in 2008

American tobacco manufacturer Philip Morris, which produced brands like Marlboro and Benson & Hedges, changed its name to Altria Group in 2003. Then in 2008, shareholders spun off Philip Morris for $111.2bn in order to give it more freedom to do business outside the US. The decision to create of an independent company through the sale or distribution of new shares, subsequently meant that Philip Morris was listed on the London Stock Exchange.

6. AT&T merges with BellSouth in $101.9bn deal in 2006

Phone network AT&T was broken into eight smaller companies in the early eighties after it was found to be violating competition laws. The company then worked toward buying some companies back and BellSouth, the third biggest phone company at the time, was top of the list.

7. RBS takeover of ABN AMRO Bank for 70.4bn euros ($95.6bn) in 2007

RBS’ takeover of ABN AMRO Bank is again, one of the worst corporate deals in history. RBS led a consortium which acquired the Holland state-owned bank for 70.4bn euros ($95.6bn) in 2007. But with the credit crunch wreaking havoc the next year, the bank recorded the biggest annual loss in UK corporate history. It was later bailed out by the government and is now 82% state-owned.

Source: Dealogic

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