Open-source software development site GitHub is now being acquired by one of the largest giants in corporate software, Microsoft. Earlier in the year, Microsoft announced its $7.5 billion acquisition of the site, which offers a space for coders and software developers to provide and collectively improve code for a range of programs. As of Oct. 26, Microsoft announced that the acquisition had been completed, but that GitHub will continue to be run as an independent business with its existing platform, community and philosophy.
With the acquisition of Red Hat, IBM could expand its business in the cloud computing sector in California and globally. Red Hat brings a chance for the legacy technology company to gain market share against competitors like Amazon and Alphabet that are leading players in the cloud market.
One of the most important factors in getting value from mergers and acquisitions in California is integrating the companies to keep trading with existing partners smooth and to promote organizational efficiencies. The mergers and acquisitions process can be roughly broken down into four steps. They are conducting due diligence, coming to agreement, integrating the companies and attaining value.
People in California may experience a change in how they access health care, as leading pharmacy chain CVS has been granted approval for its merger with health insurer Aetna. The two companies had previously announced their plans to merge, but their path to approval was cleared by the Department of Justice after Aetna announced that it was selling off its Medicare Part D drug plan business. The insurer divested that segment of the company to WellCare Health Plans for an undisclosed sum of money after regulators expressed concerns about an overlap with CVS' Part D plan.
The popular song-recognition mobile app Shazam was acquired by California-based Apple for $400 million. While an announcement of the deal was made in December 2017, the acquisition was delayed by a European Union investigation into potential antitrust issues. However, the EU regulators approved the merger in early September. In one step following the acquisition, Apple has announced that it will be removing all advertising content from the app. The ad content will be removed on both the iOS version, for Apple's mobile devices, and the Android version.
Those who live and work in California may be familiar with a company called WeWork. It has been around for about eight years and is estimated to be worth $35 billion. The company just acquired a business called Teem for $100 million in cash. Teem and WeWork have many of the same customers, and the acquisition is said to help WeWork create flashier tools for its clients.
Energy producers drilling in the Gulf of Mexico contribute to the energy needs of California. One of those producers, Talos Energy Inc., has completed a deal to acquire Whistler Energy II, LLC, which will significantly expand its access to future reserves of oil and gas. For a purchase price of $52 million, Talos gained Whistler's annual production of 1,900 barrels of oil equivalent per day.
California residents who follow the technology and communication sectors are likely aware that the telecommunication giants T-Mobile and Sprint have announced a proposed merger. Consumer rights groups have voiced concerns about the deal and the impact that it could have on wireless service costs, and the Federal Communications Commission said on Sept. 11 that it needs more time to review the merger to determine whether or not these arguments have merit.
Companies in California engaged in mergers and acquisitions always have many details to sort through to complete the transactions. Cybersecurity represents an issue that cannot be overlooked. A data breach could produce significant liabilities and drive down the asking price for a business. In addition to looking for a history of cyber attacks, a company must manage risks arising from inside threats and the difficulty of drawing together technological platforms.
For California companies of all sizes, mergers and acquisitions can be an important way to grow the business and expand. However, one high-profile national merger between two retail chains was suddenly cancelled in August after a previous announcement and scheduled shareholder votes. Supermarket chain Albertsons and pharmacy retailer Rite-Aid were to come together in the deal, called off the day before Rite-Aid shareholders were to vote on the proposed agreement.