In 2020, TMT deals were worth $666 billion in the first three quarters, according to a GlobalData survey, marking an increase on the previous year.
TMT was the biggest sector in both value of deals and the volume, with GlobalData recording 6,608 deals in the first nine months, compared with 6,085 in the same period of last year.
GlobalData's four biggest TMT deals were NTT’s US$407 billion acquisition of NTT DoCoMo; Nvidia’s $40.0 billion acquisition of Arm, from SoftBank; Analog Devices’ $20.4 billion purchase of Maxim; and Virgin Media’s $18.8 billion merger with Telefónica’s O2 UK.
In the first nine months of 2019 TMT deals were worth $629 billion, with a further $183 billion being announced in the final quarter. If 2020 matches that level for October-December, M&A deals will be worth a total of $849 billion.
Over in the data centre space , the value of M&A deals that closed in the first eleven months of 2020 exceeded $30 billion, according to Synergy Research Group. The new record exceeded previous annual records set in 2017 and 2019. With a number of potential December deal on the table at the time of writing, Synergy found that 2020 has so far seen 113 data centre deals closed at a total value of $30.9 billion.
Here is Capacity's pick of the most read M&A stories in telecoms in 2020.
Zayo takeover
By March Zayo was a private company, owned by a joint venture of Digital Colony and EQT after completion of a $14.3 billion purchase, 10 months after it was announced.
Digital Colony said the deal was the largest syndicated private equity investment, the fifth largest media and communications leveraged buy-out (LBO) and the second largest LBO overall since 2008.
“Zayo has amassed a world class network that is unparalleled in the markets they serve, supporting the world’s most innovative companies,” said Marc Ganzi, CEO of Digital Colony and CEO-elect of Colony Capital.
Jan Vesely, partner at Stockholm-based EQT, said: “Zayo is ideally positioned to meaningfully expand its offerings and services against the backdrop of accelerating demand for innovative fibre infrastructure solutions.”
TPG/VHA
The final stage in the merger of two Australian rivals to Telstra and Singtel’s Optus took place in June when shares in the combined business go on sale.
Shares in the merged company formed from Vodafone Hutchison Australia (VHA) and TPG Telecom will be traded on the Australian Stock Exchange (ASX) will be listed from 30 June.
TPG Telecom shareholders gave their final approval to the deal this week, after two years of legal wrangling with the regulator. Iñaki Berroeta, CEO of VHA, will be CEO of the merged company.
TPG Telecom owns AAPT, iinet and Pipe Networks. VHA’s main shareholders are UK-based Vodafone Group and Hong Kong’s CK Hutchison, which once operated a network in Australia under the Three brand.
The combination will also have its own subsea interests including PPC-1 and SEA-US, plus capacity on the Southern Cross cable.
Comtech, Gilat merger terminated
Telecommunications Corp. and Gilat Satellite Networks Ltd. agreed to terminate the merger they first proposed in January 2020.
The deal would have seen a significant expansion of the Comtech portfolio in a transaction valued at $532.5 million. Comtech was offering $10.25 per ordinary share, paying 70% in cash and 30% in Comtech common stock. If completed it would have seen the two dominate the cellular backhaul sector with an estimated 80% market share.
However, in a joint statement released at the time, executives from the two companies said the pandemic made the timing of the deal “challenging”.
In their statement, Fred Kornberg, Comtech’s chair and CEO, and Dov Baharav, chair of the Board of Gilat, said: “While we both believed from the outset that the merger of these two great companies was a perfect marriage, the Covid-19 pandemic made the timing of the combination particularly challenging.
“We concluded, that under current conditions, the settlement is the best path forward for both companies and their respective stakeholders,” they continued.
Liberty Global and Telefónica’s UK groups
Following five months of negotiations, the proposed merger of the UK operations of Liberty Global and Telefónica was agreed in a deal worth £42 billion.
Reports of the merger first broke in May, with industry commentators expecting the new business to have the means to compete directly with both BT in the operator market and Comcast-owned Sky in the pay-TV market.
Although both parties remained tight lipped during negotiations, a statement released by Telefónica read: “The process started between both parties is in negotiation phase, with no guarantee, at this point, precise terms or its probability of success”.
The merger allows Telefónica to leverage capital from O2 while maintaining a presence in Britain, while allowing Virgin to access its own wireless network, removing the need for it to continue leasing capacity for mobile operations. The parent companies “expect to achieve £700 million worth of synergies”.
T-Mobile/ Sprint
In a deal that promised to create "the best wireless carrier" in the US, T-Mobile US acquired Sprint on 1 April, allowing the former to better compete with AT&T and Verizon. The deal was two years in the making and the ownership of DISH network took even longer to settle.
Funding was one hurdle. Banks were called on to provide loans of up to $23 billion and had been planning to sell the debt to investors, but the coronavirus pandemic meant they were unable to carry out roadshows.
In June, the loss-making SoftBank Group said it was to sell around two-thirds of its stake in T-Mobile US in order to raise US$21 billion to plug its own funding holes. But now the focus for T-Mobile is on network integration and shutdown of the Sprint network is currently scheduled for 2022.
Mike Sievert, the former COO of T-Mobile US, became CEO of the enlarged operation on 1 May, replacing John Legere, who stepped down.
