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The 7 Biggest Mergers of All Time (Exxon Didn't Even Make the List)

By Todd Campbell - Updated May 12, 2017 at 1:54PM

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Here are the largest mergers and acquisitions in history.

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Megamergers aren't very common, but when they happen, the numbers involved are truly massive. For example, Exxon's $79 billion merger with Mobil doesn't even crack the top seven deals of all time in terms of value. Here's a list of seven deals that were bigger.

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No. 1: Vodafone merges with Mannesmann -- $180 billion

In the late 1990s, mobile phones were becoming mainstream, and that was fueling excitement among telecom providers, including Vodafone (VOD 0.54%). Vodafone spent $60 billion buying AirTouch, a U.S. cellular company, in 1999, and subsequently, it launched a contentious battle to buy German telecom giant Mannesmann in 2000.

Sadly, this big merger was a big dud. After Mannesmann rejected Vodafone's first offer, Vodafone had to nearly double its offer to about $180 billion to get this deal done. Unfortunately, the combination didn't work out the way Vodafone hoped, and as a result, it had to write off tens of billions of dollars in the following years because of it.

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No. 2: Time Warner lands America Online -- $165 billion

Before blazing-fast Internet was offered by cable companies, most Americans used their landline phone service to access the Internet via America Online, or AOL. Founded by Steve Case, a technology visionary, AOL became one of the biggest technology companies in America, and that success led to media giant Time Warner (TWX) forking out a staggering sum to acquire it in 2000.

Unfortunately, broadband Internet access ultimately left AOL's dial-up service in the cold, and big differences in culture caused major problems integrating the two companies. Synergies (and growth) that had been promised never materialized, and eventually that caused large write-offs. Ultimately, AOL was spun off with market value of only $3.5 billion. 

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No. 3: Verizon Wireless + Verizon Communications -- $129 billion

Remember how Vodafone bought AirTouch in the late 1990s? Well, shortly thereafter, it cut a deal with Bell Atlantic -- now Verizon Communications (VZ 0.83%)-- to combine AirTouch with Bell Atlantic's wireless business to create Verizon Wireless. 

Verizon Wireless went on to become a dominant force in U.S. wireless services, and in 2013, Vodafone sold its 45% stake in it to Verizon for $59 billion in cash and $60 billion in Verizon shares. That's a pretty good return on the $60 billion Vodafone initially spent on AirTouch.

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No. 4: RFS Holdings banks on ABN Amro -- $98 billion

RFS Holdings was a three-bank consortium spear-headed by Royal Bank of Scotland (NWG 1.25%) that acquired the Netherlands banking powerhouse ABN Amro right before the global financial crisis (talk about bad timing!).

RBS, the Belgian-Dutch bank Fortis, and Banco Santander paid the now unbelievable sum of three times book value to acquire ABN Amro in 2007. RBS landed ABN Amro's London investment banking business, plus some Asian operations. Fortis got ABN Amro's Dutch banking, asset management, and private banking businesses. Santander walked away with assets in Italy and Brazil.

The bad timing -- and the steep price -- made this acquisition a big bust. Fortis ended up being nationalized, and two big bailouts left the British Treasury owning two-thirds of RBS. In addition to writing off assets acquired in the ABN Amro deal, RBS has lost an astonishing 58 billion pounds since 2008.

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No. 5: SABMiller sells to AB InBev -- $90 billion

Combining these two companies created a brewing behemoth boasting over $55 billion in annual sales that's responsible for nearly 3 of every 10 beers sold worldwide. But, since this deal only happened last year, it will be a while before we know if it's a success or a failure.

AB InBev (BUD 0.84%) and SABMiller were forced to sell some of their brands to secure regulatory approval for their tie-up, but the deal has made AB InBev a much bigger player in emerging markets, including China, and the company thinks those markets will be a big driver of future growth. Only time will tell if sales growth in the Middle Kingdom and beyond ends up justifying this deal's lofty cost.

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No. 6: Warner-Lambert warms up to Pfizer -- $89 billion

Pfizer's (PFE 3.77%) acquisition of Warner-Lambert in 2000 created the planet's second-biggest drug company, but it wasn't just scale that was behind this deal. Pfizer's interest in Warner-Lambert was driven predominately by Warner-Lambert's top-selling cholesterol drug, Lipitor. Pfizer had commercial rights to Lipitor, but Pfizer was splitting profits on it with Warner-Lambert, and in 1999, Warner-Lambert sued Pfizer to end their licensing pact.

Pfizer's acquisition removed the risk of losing out on Lipitor, and since Lipitor's sales ended up growing from about $5 billion annually to more than $13 billion annually, gaining full control over it was smart -- especially since this acquisition was an all-stock deal.

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No. 7: AT&T reunites with BellSouth -- $86 billion

When AT&T (T 1.27%) announced its acquisition of BellSouth in 2006, it emphasized billions of dollars in potential cost savings, but Cingular Wireless -- the wireless company shared by the two telecom providers -- was the real reason behind this combination.

In the mid-2000s, Cingular Wireless was the biggest wireless provider in the U.S., with 54 million customers. AT&T owned 60% of it, so it was already a big beneficiary of Cingular's success. However, AT&T recognized that telecom market was moving toward a convergence of television, computers, and wireless accessibility, and that made acquiring the remaining 40% of Cingular that BellSouth owned very important to it. 

Today, smartphones and tablets are commonly used to access entertainment wirelessly, and  AT&T's mobility segment represents 43% of the company's total revenue. In my book, that makes this a smart deal for AT&T.

Todd Campbell owns shares of Pfizer. His clients may have positions in the companies mentioned. The Motley Fool owns shares of and recommends Anheuser-Busch InBev NV and Verizon Communications. The Motley Fool recommends Time Warner. The Motley Fool has a disclosure policy.

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Stocks Mentioned

AT&T Inc. Stock Quote
AT&T Inc.
$18.27 (1.27%) $0.23
Verizon Communications Inc. Stock Quote
Verizon Communications Inc.
$45.15 (0.83%) $0.37
Pfizer Inc. Stock Quote
Pfizer Inc.
$50.11 (3.77%) $1.82
Time Warner Inc. Stock Quote
Time Warner Inc.
Anheuser-Busch InBev SA/NV Stock Quote
Anheuser-Busch InBev SA/NV
$54.89 (0.84%) $0.46
Vodafone Group Plc Stock Quote
Vodafone Group Plc
$14.84 (0.54%) $0.08
NatWest Group Stock Quote
NatWest Group
$6.48 (1.25%) $0.08

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