The Most Notable Acquisitions of the COVID-19 Era
The COVID-19 pandemic has critically affected businesses across many industries. Due to the pandemic, 43% of businesses had temporarily closed, and businesses reported having reduced their active employment by 39% since January. On the consumer side, spending has been significantly reduced. Though, even in the volatile and unpredictable state of today’s economy, mergers and acquisitions prevail. Below, in no particular order, are the most notable acquisitions of 2020.
1. Tiffany and LVMH.
After a bitter dispute between the two companies, LVMH Moët Hennessy Louis Vuitton SE (“LVMH”) and Tiffany & Co. have finally agreed on a purchase price of $131.50 per share in cash. This final price is a decrease from the $135 per share that was originally agreed upon, bringing the total down to $15.8 billion, $400 million less than the original $16.2 billion. In September, LVMH announced that it would desert its intended acquisition of Tiffany, blaming its desertion on a trade fight between Brussels and Washington. Though, some analysts believed that the move was a bid to renegotiate the sale. Tiffany countered by suing LVMH, claiming that LVMH had breached its obligations to satisfy the terms of the merger. LVMH countersued, blaming the COVID-19 pandemic for having devastating, lasting, and damaging effects on Tiffany's business. Tiffany & Co’s willingness to accept a lower price ends the dispute between both companies, making this acquisition the most eventful deal of 2020.
2. Salesforce and Slack.
Moves are being made in the world of enterprise software, including Salesforce’s acquisition of Slack. Salesforce is an American cloud-based software giant known for its enterprise apps and its customer relationship management (CRM) tools. This acquisition makes sense, as Slack is a leader in the development of business communication platforms. This collaboration between the two companies will relieve its users of having to toggle between multiple platforms, instead of only needing to use one collaborative platform for all its business needs. This union between the platforms will allow salesforce to complete with the likes of Google Suite and Microsoft Teams.
3. Fitbit and Google.
Google seeks to acquire Fitbit for 2.1 billion, but must first jump through regulatory hurdles. With many large mergers, there are antitrust and privacy concerns—both of which caught the attention of the European Union and Australia’s Competition & Consumer Commission (ACCC). Guidelines of approval have already been set with the ACCC, but approval has not yet been granted by the European Union. Google hopes to use Fitbit to improve upon its smartwatch technology and rival Apple in the space of healthcare technology.
4. Amazon and Wondery.
Both Apple and Sony Music Entertainment have expressed interest in purchasing the podcast maker, Wondery, but Amazon wins the day with an agreement to purchase the podcast network for roughly $300 million. Amazon, in an effort to up its podcast game, recently added millions of episodes of podcasts to Amazon Music this September. Amazon has also announced that it is producing original podcasts exclusively for Amazon Music, which include shows from DJ Khaled, Becky G, and Will Smith. In addition, Audible, also owned by Amazon, recently added thousands of podcast shows. Should Amazon follow through with the Wondery acquisition, it will be better able to compete with the podcast powerhouse, Spotify.
5. Boohoo and Oasis Brands.
In June, Boohoo agreed to add Warehouse and Oasis brands to its repertoire. Both Warehouse and Oasis will leave Hilco Capital and join the likes of Nasty Gal and prettylittlething under the rapidly expanding Boohoo umbrella. Boohoo CEO, John Lyttle, described the acquisition as low-risk, stating "Whilst there is a period of uncertainty within the markets in which we operate, the group is well-positioned to continue making progress towards leading the fashion e-commerce market globally." Boohoo’s ambitious goals are becoming increasingly likely, as it is acquiring more struggling and growing brands during a time when many businesses are closing up shop.
6. Opening Ceremony and New Guards Group.
New Guards Group (NGG), like Boohoo, aims to take over a large chunk of the fashion market. Though, NGG seeks to do so by acquiring mostly streetwear brands—a method not yet done by any fashion conglomerate. Its newest acquisition is Opening Ceremony, an American streetwear brand based in New York City. Opening Ceremony now joins other streetwear brands under the New Guards Group umbrella, including Off-White, AMBUSH, and Palm Angels. Opening Ceremony's founders Carol Lim and Humberto Leon will continue to act as co-creative directors. Opening Ceremony’s in-house production line will be relocated to Milan, with product releases being more frequent and diverse.
7. BuzzFeed and HuffPost.
BuzzFeed is set to acquire HuffPost (formerly The Huffington Post) from its current owner, Verizon Media, as part of a larger deal between the two companies. Although Buzzfeed will be the new owner of HuffPost, the websites and editorial staff will remain distinct. The deal between Buzzfeed and Verizon Media will allow Verizon Media to become a minority shareholder in BuzzFeed, but without an official seat on the board. In addition to the stock deal, Verizon Media is set to invest an undisclosed amount in Buzzfeed. The Buzzfeed team will lead the search for HuffPost’s next Editor-in-Chief, who is to replace Lydia Frances Polgreen.
8. Facebook and Packagd.
To build its live shopping feature, Facebook acquired a small start-up and hired the majority of its staff. The video-shopping startup named Packagd was primarily focused on building a shopping product for YouTube videos. Now, the start-up crew turned Facebook personnel are working on a project for Facebook Marketplace, which would let users make purchases from the live video broadcasts while watching it. This acquisition, though small, has an enormous impact on Facebook’s footprint in e-commerce. Facebook has unsuccessfully tried to capitalize on e-commerce in the past. With this new technology, Facebook may be able to join Alibaba Group Holding Ltd. as trailblazers in the live shopping community.