Notably, the M&A market has been tumultuous since the beginning of 2023, triggering companies to alter their deal structures and utilize the market's volatility to decrease costs as much as possible. Nonetheless, looking at the most significant M&A transactions of 2023, we can observe a significant majority of transactions in industries such as aircraft and biopharmaceuticals, suggesting companies' readiness to adapt to this volatile climate thus far.
According to PwC's Global Deals Leader, portfolio optimization and driving growth and transformation remain top priorities for organizations, with having a central strategic role in accomplishing these goals playing a key role.
2023 is expected to be another good year for worldwide M&A activity, so let's take a look at the largest deals that are expected to or have already closed this year.
Johnson & Johnson and Abiomed
Johnson & Johnson has agreed to acquire all outstanding shares of Abiomed, a manufacturer of heart, lung, and kidney support systems. The transaction entails a cash payment of $380 per share, for a total enterprise value of $16.6 billion. The acquisition will increase and diversify Johnson & Johnson's portfolio of heart failure and recovery services, while also bolstering the company's position as a world-leading pharmaceutical by providing a comprehensive pipeline of technologies and clinical investigations. Abiomed will become an independent company inside J&J MedTech once the deal is completed, becoming one of 12 JJMT priority platforms.
This acquisition reveals JJMT's shifting strategic objectives toward pharmaceutical and medical technology. Johnson & Johnson is diversifying, and joining the MedTech industry provides a tremendous potential to capture any whitespace in the high-growth segment. The capabilities of Abiomed will help to speed the mass adoption of lifesaving technologies, which is a core vision of Johnson & Johnson. Johnson & Johnson also gains a strong R&D program, exclusive FDA approvals, and a portfolio of ongoing controlled trials as a result of the acquisition.
On the financial front, the acquisition will not only increase short-term company revenue but will also improve profitability as Johnson & Johnson strengthens its position as a cardiovascular innovation. The deal is expected to close by the end of the first quarter of 2023 and is subject to the tender of a majority of the existing shares of Abiomed's common stock as well as regulatory approvals, such as those pertaining to antitrust issues given the nature of this transaction.
Toshiba and Japan Industrial Partners
Toshiba, based in Tokyo, is slated to be acquired by a consortium led by private equity firm Japan Industrial Partners. The Toshiba board of directors accepted the group's $15 billion buyout offer. If the purchase goes through, JIP and its other investors, which include Orix Group, Rohm Co, and Chubu Electric Power, will own one of Japan's most popular enterprises. This would also be the third-largest transaction in the world this year, according to Refinitiv data. The consortium presented a binding takeover bid supported by $10.6 billion in significant bank loans. The procedure was often delayed as the JIP-led group encountered difficulties in obtaining money as banks were unduly cautious in a volatile economic environment.
As JIP endeavors to consolidate its proposal, Japanese chipmaker Rohm Co Ltd said it was considering joining a group formed by private equity fund JIP to buy out Toshiba Corp.
Both Rohm and Toshiba are key producers of power management chips, which control electric power in automobiles, electronic gadgets, and industrial equipment. Despite its diminishing presence in the global semiconductor sector, Japan has capabilities in this field. In addition, Suzuki Motor Corp planned to contribute tens of billions of yen in the proposed arrangement, and construction giant Taisei Corp also planned to participate, though the magnitude of its proposed investment was unknown.
Amazon and One Medical
Amazon's unrelenting effort to become a primary care provider recently hit a watershed moment when the e-commerce giant completed its $3.9 billion acquisition of One Medical. But, as with other operations involving retailers attempting to improve health care, the tale is just getting started.
Amazon and One Medical are working together to provide great health care to more people to achieve better health outcomes, better care experiences, and more value within a better care team atmosphere. However, while Amazon can complete the transaction without fear of an FTC antitrust suit, the agency is still reviewing the acquisition and may dispute it after the fact. The more challenging task now is to integrate the concierge medicine provider's services into Amazon's operations and develop plans to meet consumers' demands across the care continuum. The shift to provider status would widen Amazon's substantial health care portfolio, but the business still has a long way to go if it wants to compete with retail primary care providers like CVS Health and Walgreens Boots Alliance.
LHC Group and UnitedHealth Group
The $5.4 billion acquisition of LHC Group by UnitedHealth Group is now complete. On Wednesday, LHC filed with the Securities and Exchange Commission to signify the completion of the transaction. LHC Group will be absorbed by UnitedHealth Group's Optum division. According to the filing, the combination will allow Optum and LHC to leverage their combined experience to provide value-based home care. The transaction was completed following a lengthy investigation by the Federal Trade Commission, which requested additional information on the merger in June. In December, UnitedHealth and LHC extended their agreement to accommodate the probe.
UnitedHealth and LHC also encountered opposition from one of the home health provider's shareholders, who filed a lawsuit to halt the transaction on the grounds that LHC failed to disclose material information about the merger. According to the shareholder claim, an SEC filing recommending that owners approve the deal omitted important financial facts as well as a deadline for the sales process.
Advent International and Maxar
Advent International has completed its acquisition of Maxar, which included a minority investment from British Columbia Investment Management Corporation. Maxar will cease to be a publicly traded corporation, and its shares will cease to trade.
The deal, which was announced in December, paid $53 per share for Maxar, a premium over the company's trading value. The deal has an enterprise value of $6.4 billion and a debt of $2.4 billion. The purchase was just authorized by Maxar's shareholders. When the Advent agreement was revealed, Maxar CEO Dan Jablonsky stated that it will expedite the launch of the Worldview Legion 7 and 8 satellites, which were scheduled for later this decade.