In recent times, the Famous Five FAANG
Club of Facebook, Apple, Amazon, Netflix and Google have monopolised the technology headlines, and not always for the right reasons. But this week the sector has been focused on a selection of high profile financial manoeuvres.
And none were bigger than the one inked by Vodafone
which has agreed to pay £16 billion for Liberty Global’s cable TV and broadband businesses in Germany and eastern Europe. Vodafone turned itself into the world’s number one mobile operator by revenue via a long string of acquisitions during the 90s which culminated ultimately in the firm paying $183 billion to takeover Mannesmann in Germany at the height of the telecom boom in 2000.
Like the poker player
whose winning streak comes to a catastrophic end on the biggest hand of his life, that bubble burst and five years later Vodafone announced one of the biggest post-acquisition writedowns in history (£28 billion). This latest deal is the biggest acquisition since the ill-fated Mannesmann buyout and will help transform the mobile powerhouse into a converged broadband, cable TV and mobile powerhouse, which, the carrier hopes, will help it to compete with the likes of Orange, Deutsche Telekom, and Telefonica.
Another firm clicking on ‘Proceed to checkout’ this week was retail giant Walmart
. Perhaps still reeling from selling off Asda to Sainsbury’s for £10 billion – and Sainsbury’s boss Mike Coupe
demonstrating what not to do when waiting to be interviewed on TV – Walmart will fork out $16 billion (£11.81 billion) for a controlling stake in Indian e-commerce firm Flipkart.
Selling the UK’s third biggest supermarket and buying India’s leading e-commerce company seems like astute business. The deal will help establish Walmart as a serious online retailer in a country set to overtake China soon as the world’s most heavily populated. Amazon may rule the roost in the world’s ‘developed’ economies, but there’s all to play for everywhere else.
Well, almost everywhere else. China is pretty much sewn up, for the foreseeable future at least. Sure, Amazon China has a foothold having acquired Chinese online shopping website Joyo.com back in 2004. But Asia’s most valuable company, Tencent, dominates the e-commerce landscape. And this week Tencent
gave Brexiteers something to cheer for when it signed a Memorandum of Understanding with the UK’s Department for International Trade to work closely in the cultural and creative fields. While the implications of this deal are still to play out, with the UK on the verge of making things difficult with its biggest trading block, it makes sense to cosy up a bit more to China.
In recent years Tencent has made numerous international investments in e-commerce, payments and gaming firms. Closer to home, meanwhile, Tencent-backed online healthcare provider WeDoctor
has raised $500 million from private investors valuing the firm at $5.5 billion ahead of its planned IPO later this year. Founded in 2010, WeDoctor provides diagnosis and online appointment booking, and is among a growing number of tech firms looking to support China’s struggling public healthcare market. With Britain and China making friends these days, it’s not inconceivable that Tencent’s WeDoctor could find itself put into service to support the UK’s struggling public healthcare market.
Staying in China and a different type of DoC altogether, telecoms network infrastructure and handset behemoth ZTE
announced it would be shutting down all major operating activities as a result of the US Department of Commerce slapping a seven-year ban
on American firms doing business with the vendor. ZTE is in the midst of trying to negotiate a settlement with the DoC, this sudden withdrawal of service is likely to hurt numerous US tech giants who rely on ZTE’s products.
And that brings us to the end of today’s financially flavoured AxiOnline proving that sometimes in technology it’s not what you invent but who you buy that makes all the difference.
- Sean Jackson