Disruptive technology as a driver of M&A in the technology and innovation sector – key trends

Publication January 2019

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The technology sector has seen a flurry of M&A activity. With digital transformation a key strategic goal for most businesses, the providers of new technologies are themselves targets for acquisition.

  • Businesses are making acquisitions to gain access to new technologies and processes to complement their existing operations.
  • 2018 has seen a continued diversification of the buyer class in the technology sector, whether by type or geography. Corporates, private equity and financial institutions have set their sights on technology, including a number of acquisitions made by joint venture acquirers pooling knowledge and capital.
  • The mobile payments sector, particularly in emerging markets, has proved fertile ground for M&A with strong private equity interest in fast-growing payments providers. These mobile payment companies are using increasingly sophisticated technologies - including AI, big data and algorithms - to provide essential financial services via mobile phones.
  • In a similar vein, M&A activity in the telematics, mobility services and cloud technology industries continues to grow as investors, including automotive companies, seek to bring a wide range of technological solutions in-house.
  • Against this picture of growth, however, regional and domestic competition authorities have flexed their muscles, showing a greater willingness to scrutinise merger activity in the technology sector. Foreign takeovers are under the spotlight, too, for national security concerns with several countries proposing tighter regulation of this space.

Case study

Norton Rose Fulbright advised BMW on a joint venture with Daimler combining their global mobility services.

BMW and Daimler will unify their global mobility services regarding car sharing, ride-hailing, parking, charging and multimodality. Both companies will each hold 50 per cent of the shares in the joint venture, which will solely comprise both groups' mobility services.

BMW will contribute to the joint venture with its car sharing service DriveNow, its multi modal service ReachNow and its mobility services for charging (ChargeNow) and parking (Parkmobile). Daimler will join with its ride-hailing service mytaxi (including Chauffeur Privé, Clevertaxi and Taxibeat), also with its car sharing service car2go and its multi modal platform moovel.

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