©IDG Communications, Inc. Photo contributed by Matthew Mikaelian.
Business Insider, 3/21/11
Huge acquisitions like AT&T’s proposed buyout of T-Mobile make headlines, alter the competitive landscape, and make bankers rich.
But they don’t do much for shareholders.
We’ve run down the top 10 tech acquisitions of all time in which the resulting company remained public.
In nearly all cases, the acquiring company’s stock price is at or below where it was when the acquisition was made.
Some of this is because of timing and market fluctuation — when times are good, big companies are tempted to use their inflated share prices to gobble up smaller ones so they can gain ground on competitors. That happened a lot in the dot-com and telecom bubbles.
It’s also possible that some acquisitions saved companies from a worse fate — it’s impossible to know what would have happened to AOL, for instance, if it hadn’t had Time Warner to carry it through the dot-com bust.