2023 was a challenging year in the M&A space, with activity impacted by market volatility and fluctuating macroeconomic conditions, such as rising interest rates and record-high inflation. Downtrends in M&A activity have persisted since a steep dropoff in 2022.
According to Reuters, M&A activity fell to its lowest level in ten years globally in 2023, as high interest rates and an economic slowdown weighed on companies’ deal-making confidence.
M&A volumes fell 18% to $3 trillion, the lowest since 2013 when deal volumes were at $2.8 trillion.
Despite these headwinds, several notable deals managed to surface in 2023, providing optimism for a resurgence in activity moving into 2024. Below, we highlight some of the biggest M&A deals of 2023 within the technology, energy, and healthcare spaces.
Related Reading: Top M&A Trends and Outlook for 2024
Broadcom Acquisition of VMware: $69 billion (Completed in November 2023)
Broadcom completed its acquisition of VMware, a cloud technology firm, in November 2023, paying $61 billion in cash and stock, making it one of the largest technology deals ever.
Expert insights from the AlphaSense platform provide key insights and industry reactions to the deal:
According to a VMware customer: “VMware has always been a market leader compared to [firms like] Microsoft.” The expert also believes that VMware products will continue to have a strong demand in the marketplace following the Broadcom acquisition.
Another expert perspective from a former country manager offers insights into the competitive landscape following the acquisition: “Right now you see a heavy competition battle going on in the Kubernetes market. You see Red Hat, which was acquired by IBM, competing heavily with VMware, which was recently acquired by Broadcom, with their product Tanzu. I’ve been around the IT industry for about 30 years now. Red Hat, VMware and SUSE, and they all battle for the same deal.”
Pfizer Acquisition of Seagen: $43 billion (Completed in December 2023)
Earlier in the year, Pfizer Inc. announced its plans to acquire cancer-drug maker Seagen Inc. for $43 billion.
The healthcare deal, the industry’s largest since 2019, was funded by Pfizer’s cash holdings and profits yielded from Covid vaccines and treatments.
“This acquisition combines the oncology expertise of both companies to realize the value of Seagen’s commercial portfolio by leveraging Pfizer’s global scale and footprint to create significant R&D opportunities.”
– Albert Bourla, Chairman and CEO of Pfizer | Analyst and Investor Call 2023
“I think it’s a good marriage. I think that they need the expertise of some of the things that Seagen offers. We certainly are the leaders with ADC, I would say, in the linker systems that they use. Pfizer has some stuff that would be complementary and different. They have bispecifics and some other molecules that are certainly going to be the future or part of the future as well as ADCs.”
– Former Seagen Principal Liaison | Expert Call
Amgen Acquisition of Horizon Therapeutics: $27.8 billion (Completed in October 2023)
The Amgen acquisition of Horizon Therapeutics was the first of its kind in over a decade to be challenged with litigation from the Federal Trade Commission (FTC).
In May 2023, the FTC sued to block the deal alleging that the acquisition would unfavorably position Horizon’s two monopoly products Tepezza and Krystexxa in the marketplace. Eventually, the FTC issued its blessing of the deal under the condition that Amgen would be prohibited from bundling any of its products with Tepezza and/or Krystexxa.
According to an expert call found in the AlphaSense platform, a former Horizon manager believes the company has strong potential for continued growth under Amgen’s control.
ExxonMobil Acquisition of Pioneer Natural Resources: $59.5 billion (Announced in October 2023)
In October, Exxon Mobil revealed plans to make a stock-only acquisition of Pioneer Natural Resources valued at $59.5 billion. The deal is expected to close in the first half of 2024 upon successful regulatory approvals.
The purchase unites Pioneer’s expansive land holdings of over 850,000 net acres in the Midland Basin with Exxon’s 570,000 net acres in the Delaware and Midland Basins—consequently, creating the industry’s foremost inventory of high-quality, untapped U.S. unconventional resources.
Upon its close, ExxonMobil’s production volume in the Permian Basin is set to more than double, reaching 1.3 million barrels of oil equivalent per day, based on 2023 levels, and is anticipated to grow to approximately 2 million by 2027.
In a company publication sourced from the AlphaSense platform, Pioneer CEO Scott Sheffield commented, “The combination of ExxonMobil and Pioneer creates a diversified energy company with the largest footprint of high-return wells in the Permian Basin.”
For additional information on the deal, please reference the following:
ExxonMobil 10-Q Filing (September 30, 2023)
Chevron Corporation Acquisition of Hess Corporation: $53 billion (Announced in October 2023)
Chevron Corp. announced its intent to purchase Hess Corporation in an all-stock transaction valued at $53 billion.
Chevron’s acquisition of Hess elevates and diversifies Chevron’s already impressive portfolio. Hess’s unique territorial assets are positioned to deliver production growth into the next decade and strengthen domestic energy security.
The deal is expected to accelerate production and free cash flow faster and longer than Chevron’s current five-year guidance. The acquisition consideration is structured with 100 percent stock utilizing Chevron’s equity. In aggregate, upon closing of the transaction, Chevron will issue approximately 317 million shares of common stock.
Chevron also recently scooped up PDC Energy Inc. in August 2023 for $6.3 billion, acquiring PDC’s 275,000 net acres in the Denver-Julesburg (DJ) Basin adjacent to Chevron’s existing operations.
Analyst research procured by Societe Generale and sourced within the AlphaSense platform finds that Chevron gained a best-in-class resource and diversified its upstream portfolio further through Hess’s lucrative stake in the Guyana Stabroek Block region, which is also heavily trafficked by competitors ExxonMobil and China National Offshore Oil Co.
Cisco Acquisition of Splunk: $28 billion (Announced in September 2023)
Earlier in the fall, Cisco Systems announced its intent to acquire Splunk in a deal valued at approximately $28 billion. The deal represents its largest-ever acquisition and a continued focus into building out its AI, security, and observability capabilities.
“We’re excited to bring Cisco and Splunk together. Our combined capabilities will drive the next generation of AI-enabled security and observability,” said Chuck Robbins, chair and CEO of Cisco. “From threat detection and response to threat prediction and prevention, we will help make organizations of all sizes more secure and resilient.”
A former Engineer at Cisco believes the Splunk acquisition will be highly beneficial for Cisco and will result in significant workload reductions and broad efficiencies.
An expert competitor perspective also sourced from the AlphaSense platform suggests that while Cisco has historically struggled to integrate its acquisitions, there may be enough synergy from the deal to accelerate revenue and ideal market positioning, resulting in a FOMO effect for competitors wanting to also get in on M&A activity.
Thoma Bravo Acquisition of Coupa Software: $8 billion (Completed in February 2023)
Thoma Bravo, a private equity firm specializing in software investment, completed its acquisition of Coupa Software in an all-cash transaction valued at approximately $8 billion. Coupa Software is a leading provider of business spend management software.
With completion of the deal, Coupa stockholders received $81 per share for each share of Coupa common stock they owned. Coupa’s common stock also ceased trading and was delisted from Nasdaq.
“This is an important milestone for Coupa, underscoring our market-leading position and the value we’re co-creating with our customer community,” said Rob Bernshteyn, Chairman and CEO at Coupa. “Thoma Bravo shares our vision and brings strategic and operational expertise. This move is an opportunity for us to strengthen our business fundamentals and continue delivering leading-edge innovation on our platform.”
For additional information on the deal, please reference the following:
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Content Marketing Manager
Barb is a Content Marketing Manager covering the financial services segment at AlphaSense. Previously, she managed the content program at a global financial services firm.
Read all posts written by Barbara Tague
