M&A Activity In ICT Sector Makes Recovery In 2010

Merger and acquisition (M&A) activity in the information and communications technology (ICT) sector made a strong recovery in 2010 as the global economy and IT spending rebounded from the recession of 2008-2009. According to a new International Data Corporation (IDC) report, there were more than 1,900 M&A deals in the ICT sector in 2010 with a total valuation of over $200 billion.

The vast majority of M&A deals in 2010 were concentrated in application-related areas, including enterprise applications (586 deals) and Internet applications (421 deals). Activity also surged in the infrastructure segment where there were more than 219 deals led by strong interest in security and storage companies.

From a valuation perspective, the telecommunications segment was particularly active in 2010 with seven of the year's top 10 megadeals involving service provider networks. Among these megadeals was CenturyLink's acquisition of Qwest for $22.4 billion and América Móvil's $21 billion deal for Telemex. Intel's $7.7 billion deal for McAfee and SAP's acquisition of Sybase ($5.8 billion) were the largest megadeals in the infrastructure segment.

The most active companies on the M&A landscape were Google, which made 27 deals in 2010, followed by AOL and Facebook with 9 deals each. Among the major IT vendors, Cisco, Dell, HP, IBM, Intel, Oracle, and VMware all displayed a renewed appetite for acquisitions.

"The renewed confidence accompanying the recovery in IT spending helped to make 2010 a turnaround year for technology M&A activity," said Dan Yachin, Research Director, Emerging Technologies, IDC. "Looking ahead, IDC expects 2011 to be another active year as companies make strategic investments in a variety of critical areas, such as converged infrastructure, mobile content, service creation and enablement, data analytics (and the supporting infrastructure), and pervasive computing."

"IDC recognised the need for comprehensive, timely deal analysis coupled with a clear understanding of the impact these deals have on markets, buyers, and investors," said Ryan Patterson, Program Manager, IDC's Private Vendor Watch Service.

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Updated Date: Feb 02, 2017 23:01:10 IST

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