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April 17, 2017

Biggest tech acquisition rumours in 2017

Will Oracle acquire Accenture or Microsoft buy Salesforce?

By James Nunns

The big vendors in the tech industry are just a little bit fond of an acquisition, as is made apparent by the near monthly shopping spree from at least one of the tech giants.

Some companies have a longer history of acquisitions, some have, for the most part, bought and managed to make a success of it, while others have somewhat of a sketchier track record.

Basically, tech companies like to buy other tech companies that will improve them in some way, shape or form and money doesn’t seem to be a barrier – just look at Dell EMC.

2016 saw the biggest ever acquisition in the history of tech with Dell’s acquisition of EMC for $67 billion. In 2017 we want to see more big money acquisitions and there’s already been a few rumours floating about to whet our whistles on.

CBR takes a look at some of the biggest potential acquisitions that have been doing the rounds.

 

Oracle to buy Accenture

In March a report surfaced that suggested Oracle might be looking into the potential acquisition of Accenture.

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The deal would see Oracle have to splash out well over $70bn for the consultancy firm but that doesn’t make it a bad deal.

Oracle’s cloud first approach aligned with Accenture’s own would help to create a cloud goliath that would surely give both companies a huge boost and make them a force to be reckoned with.

Unfortunately, Big Red has come out to quash the rumours with Oracle’s spokeswoman Deborah Hellinger saying: ”The Accenture rumour is completely untrue. Never even considered it. Completely made up.”

Oracle may have poured water on the flames but that doesn’t stop us from dreaming.

 

Microsoft to buy Salesforce

This is a rumour that’s been doing the rounds for a couple of years and with the two companies arguing over the Microsoft acquisition of LinkedIn it may seem unlikely. Microsoft.

However, where there’s smoke there is often fire.

According to CNBC, Microsoft and Salesforce held talks in 2015 over a potential $55bn deal but Salesforce CEO Marc Benioff is reported to have wanted closer to $70bn.

In theory, Microsoft could have tapped into its $95bn cash pile (at time of rumour) to buy Salesforce and Benioff may have been able to roll his 5.7% Salesforce stake into Microsoft stock and then take on a management role at the Redmond company.

There’s been rumours flying about of another party that might be showing interest in Salesforce, but at time of writing nothing has materialised.

 

Private Equity to buy HPE

HPE has had a mixed time of it over the past couple of years. The company successfully split in two and then HPE sold off a decent portion of the remaining business. The idea is to make it more streamlined and focused on storage and servers and the company has even started buying other companies again. 

But in 2016 a rumour appeared, from The Information, that private equity firm called KKR & Co LP, among others, were ‘sniffing around’ HPE and contemplating a buyout of over $40bn.

Nothing has materialised from this over the past year so we can probably say with some confidence that this isn’t going to happen.

Although HPE has been through a rocky period, it is still regarded as a top tier, high-class enterprise tech company with plenty to offer.

With HPE opening up its wallet in recent months, the new company with a long history now seems to have a game plan and being acquired doesn’t appear to be on the cards.

 

Apple to buy Disney

This would truly be a mammoth deal and one that I imagine many companies would fight against, but research from RBC Capital Markets has been taking a deeper look at it.

RBC said that an acquisition would create a “tech/media juggernaut like no other,” which is true, because it would combine a media giant that’s almost 100 years old and still going strong, with the biggest tech company in the world. 

Apple is said to have around $230bn cash stockpiled and it would need all of that and more, accord to RBC’s analysts, if it were to buy Disney. The analysts suggest that it would cost around $237bn, dwarfing any previous deal made by the company – the largest being $2.2bn for Beats.

The deal would give Apple another revenue source aside from the iPhone, which currently accounts for more than 60% of its revenue and it would also give Apple a way of competing with Netflix and Amazon.

But will it happen? Probably not. Even the analysts label it as a “greater than 0% probability event” so it’s probably not worth scouring the news every day for any suggestion that a deal is on.

 

Cisco to buy Ericsson

If you look around the Internet you’ll see plenty of commentary around a potential acquisition of Ericsson by Cisco.

The Swedish networking and telecommunications company already works in Cisco financialpartnership with Cisco and in theory there’s plenty of overlap between what the companies do so there might be a good exchange of ideas and merging of technologies.

Ericsson would theoretically be valued at around $18.5bn and being gobbled up by Cisco might just be the best way for it to fight off Huawei.

For Cisco, the deal would help it to implement 5G in the US, as Ericsson’s Radio Access Network technology could help to build and manage an MNO network.

However, JP Morgan analyst Rob Hall has said that the Swedish company wouldn’t be a good fit for Cisco and that it wouldn’t make sense from a strategic or technological perspective.

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