Thematic Research: Technology GDTMT-TR-S216 Mergers & Acquisitions in TMT 24 June 2019 If you really want to understand the themes that drive an industry, just look at the list of recent mergers and acquisitions (M&A). In part 1 of this report, we Inside explain how disruptive themes have been driving M&A activity over the last . Themes driving M&A five years. In part 2, we select the most notable M&A deals announced in the . Historical M&A activity technology, media and telecoms (TMT) sector over the last five years and . Future M&A targets identify their thematic drivers. Finally, in part 3, we highlight potential acquisition targets, explaining who is likely to acquire them and why. The TMT sector dominates global M&A activity today Sectors covered In 2017, the largest M&A deal announced in the TMT sector was Disney’s HARDWARE $71bn bid for 21st Century Fox, driven by the disruptive threat of internet TV. Semiconductors In 2018, it was Broadcom’s $121bn bid for Qualcomm, driven by 5G and the . Servers, storage & Internet of Things (IoT) – though this deal was later aborted. So far in 2019, networking equipment the largest announced deal is FIS’s $35bn acquisition of Worldpay, potentially . Consumer electronics kickstarting a string of fintech deals. Component makers . Industrial automation In 2018, the total transaction value of M&A deals announced in the global TMT sector reached $630bn, up 23% from 2017, according to GlobalData’s Deals SOFTWARE Database. As the chart below illustrates, the value of M&A in the TMT sector . Application software dwarfed that of other markets in both 2017 and 2018. Security software Top M&A sectors by transaction value, 2017-2018 . Video games software 750 SERVICES 600 2017 2018 . Cloud services 450 . IT services $bn 300 150 INTERNET & MEDIA . Ecommerce 0 TMT Power Oil & Gas Construction Industrial Mining Real Estate Automotive Consumer Banking & Retail Pharma . Social media Goods Insurance . Advertising . Music, film, & TV Source: GlobalData . Publishing Which TMT companies are likely acquisition targets? TELECOMS Some of the companies we have identified as future bid targets include: . Telecom operators . Hardware & software: AMS, Lumentum, Roku, iRobot, Cognex. Cable & satellite operators . Internet & media: Asos, Ocado, Pinterest, Xing, NY Times. Telecoms: US Cellular, Dish Network, Telecom Italia. The main investment themes likely to drive these deals include artificial Report type intelligence (AI), the IoT, autonomous vehicles, medtech, adtech, internet TV, . Single theme virtual reality (VR), augmented reality (AR), robotics, cloud computing, and . Multi-theme geopolitics, particularly the race between the US and China to dominate the . Sector Scorecard next generation of advanced technologies. [email protected] www.globaldata.com +44 (0) 161 359 5813 © GlobalData 2019 GDTMT-TR-S216 Mergers & Acquisitions in TMT 24 June 2019 Contents PART 1: M&A AND THE IMPORTANCE OF THEMES ............................................................................................................ 4 Companies who invest in the right themes become success stories .............................................................. 5 Themes drive M&A strategy ............................................................................................................................ 6 PART 2: M&A ACTIVITY OVER THE LAST FIVE YEARS....................................................................................................... 7 Hardware ............................................................................................................................................................ 7 Semiconductors ............................................................................................................................................... 7 Servers, storage, and networking equipment .................................................................................................. 8 Consumer electronics ...................................................................................................................................... 9 Component makers ....................................................................................................................................... 10 Industrial automation ..................................................................................................................................... 11 Software ............................................................................................................................................................ 12 Application software ...................................................................................................................................... 12 Security software ........................................................................................................................................... 13 Video games software ................................................................................................................................... 14 Services ............................................................................................................................................................ 15 Cloud services ............................................................................................................................................... 15 IT services ..................................................................................................................................................... 16 Internet & media ............................................................................................................................................... 17 Ecommerce ................................................................................................................................................... 17 Social media .................................................................................................................................................. 18 Advertising ..................................................................................................................................................... 19 Music, film & TV ............................................................................................................................................ 20 Publishing ...................................................................................................................................................... 21 Telecoms .......................................................................................................................................................... 22 Telecom operators ........................................................................................................................................ 22 Cable & satellite operators ............................................................................................................................ 23 PART 3: FUTURE ACQUISITION TARGETS ........................................................................................................................... 24 Hardware .......................................................................................................................................................... 24 Semiconductors ............................................................................................................................................. 24 Servers, storage & networking equipment .................................................................................................... 26 Consumer electronics .................................................................................................................................... 27 Component makers ....................................................................................................................................... 28 Industrial Automation ..................................................................................................................................... 29 www.globaldata.com 2 GDTMT-TR-S216 Mergers & Acquisitions in TMT 24 June 2019 Software ............................................................................................................................................................ 30 Application software ...................................................................................................................................... 30 Security software ........................................................................................................................................... 31 Video games software ................................................................................................................................... 32 Services ............................................................................................................................................................ 33 Cloud services ............................................................................................................................................... 33 IT services ..................................................................................................................................................... 34 Internet & media ............................................................................................................................................... 35 Ecommerce 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