Business deals are a crucial decision when it comes to factors deciding the fate of any company, sector, or economy as a whole. Any deal if struck at the right place with the right organization and for the right sums can potentially boost the economic existence of the company and vice-versa. Lately, businesses have been tapping onto new resources and cracking several mergers and acquisitions which are of economic importance.
Following are the latest game-changing business deals that have either already been carried out or are under consideration:
- ORACLE AND BYTEDANCE DEAL
Recently, ByteDance declared that it is teaming up with Oracle Corp. to keep TikTok running in the United States in a deal formed as a partnership rather than an outright transfer of ownership. This announcement disoriented the deal by Microsoft.
ByteDance, TikTok’s parent company based in Beijing had been looking for opportunities to divest its business in the United States after President Donald Trump ordered the sale last month. He also said that if the deal fails to come in presence, he will shut the app down citing security reasons.
TikTok is a widely popular app especially among teenagers, best known for short dancing videos. US officials alleged that the application controls data of as many as 100 million US users which can be passed on to China’s Communist Party government. However, the company claims no such data leaks.
Oracle formed a part of a proposal that was submitted by ByteDance to the U.S. Treasury Department over the weekend in which Oracle would serve as TikTok’s “trusted technology provider”; this led to a 6.3% increase in Oracle’s shares.
- BLACKSTONE AND INDIABULLS REAL ESTATE DEAL
The Indiabulls Group is planning to step out of its real estate business so that it can get regulatory approvals for the proposed merger of Indiabulls Housing Finance with the Lakshmi Vilas Bank. Now, it is all set to get into a deal with Blackstone, a US-based investment firm.
Rumors are that the Blackstone will acquire a wholesome 39% stake, currently held by Indiabulls Chairman Sameer Gehlaut, in Indiabulls Real Estate Ltd (IBREL) through a joint venture with Embassy Group, a Bengaluru based realty firm.
According to several sources, the deal can potentially be struck for an amount of Rs. 2,700 crore at an equity valuation of Rs 7,000 crore. The deal will be carried out in three transactions. Blackstone and Embassy together will purchase a 15% share in the coming week and the remaining in the next 6-8 weeks which will be followed by an open offer to the existing shareholders of IBREL.
- VERIZON AND TRACFONE DEAL
On Monday, Verizon Communications Inc., the largest U.S. wireless carrier by subscribers, made public its decision to purchase pre-paid mobile phone provider Tracfone in a $6.25 billion cash and stock deal. Tracfone is a unit of Mexican telecoms giant America Movil.
Tracfone currently holds a subscriber base of nearly 21 million through more than 90,000 retail locations across the United States. According to the company, over 13 million Tracfone subscribers rely on Verizon’s network which is provided under an existing agreement between the companies.
The wireless industry of the United States is majorly controlled by three mobile carriers on account of multiple mergers in the last few years. America Movil, which was created from a state monopoly, is Mexico’s largest telecoms operator by far and is controlled by the family of Mexican billionaire Carlos Slim, the Latin American nation’s richest man.
As against its rivals, Verizon has not previously invested in prepaid and its take-over of Tracfone comes at a time when the pandemic has ravaged the economy, leading to Americans making huge cuts on spending.
According to Hans Vestberg, chairman and chief executive of Verizon, Tracfone gained popularity with the lower end of the ultra-competitive U.S. telecoms consumer market and Verizon will extend support to provide novel products for that segment after this “strategic acquisition.”
- INFOSYS AND GUIDEVISION DEAL
Bangalore headquartered IT company Infosys looks to acquire Czech Republic-based GuideVision which will be carried out by Infy Consulting Company Ltd. Infy Consulting Company Ltd is a step- down subsidiary of Infosys Ltd. The deal is estimated to total up to 30 million euros or approximately Rs 260.4 crore.
Infosys eyes at taking advantage of the strong presence entailed by GuideVision’s training academy and nearshore capabilities in areas of strategic importance such as the Czech Republic, Poland, Hungary, Germany, and Finland for its ServiceNow capabilities for clients based in Europe. ServiceNow is a Santa Clarita, America based enterprise software enterprise which works on developing cloud computing platforms; It helps companies in managing their operations as well as digital workflows. According to the digital filing, the acquisition is amounted to a total sum of over 30 million euros (inclusive of bonuses and earn-out) and is expected to be completed by the third quarter of the financial year 20201.
GuideVision is also offering SnowMirror which is a smart tool for data replication for ServiceNow instances as a part of its end-to-end offering. The deal would enable the company to simplify its complex business and information technology services for its clients.
- NVIDIA-SOFTBANK-ARM DEAL
NVIDIA has recently announced its definitive agreement with SoftBank Group Corp. (SBG). As per this agreement, NVIDIA will purchase SoftBank owned Arm Limited as well as SoftBank vision for a valuation of $40 billion. SoftBank, a Japanese Conglomerate, acquired Arm (UK based) only 4 years ago for a valuation of $32 billion. Vision Fund, which owns 25% of Arm, will acquire a stake between 6.7%-8.1%. Employees of Arm will also be paid $1.5 billion NVIDIA shares.NVIDIA is all set to make a payment of $12 billion in cash (inclusive of $2 billion on signing) and $21.5 billion in shares.
It is expected that this deal would lead to a high boom in non-GAAP gross margin and non-GAAP earnings per share of NVIDIA while giving a push to innovation and expansion of the companies into new and high demand markets. The agreement will combine the AI computing platform of NVIDIA and the huge ecosystem under Arm, ultimately creating a highly competitive and leading computer company.
According to the statement given by NVIDIA, SoftBank will retain ownership in Arm Limited with a stake of 10%.