As we reflect on the year’s biggest tech M&A deals, it’s evident that 2023 has been a slow year for enterprise tech mergers and acquisitions. Typically, big players like Microsoft, Salesforce, Adobe, SAP, Oracle, and Cisco make substantial moves in this space. However, this year, the landscape was notably different, with only Cisco making significant announcements, totaling 11 deals. SAP also made a couple of smaller deals, while Microsoft, Salesforce, Adobe, and Oracle remained relatively quiet.
Key Takeaway
2023 has been a slow year for enterprise tech M&A, with fewer major deals from the industry’s key players. The high cost of borrowing, regulatory challenges, and a shift towards smaller AI-related acquisitions have all contributed to this subdued M&A landscape.
Challenges Faced by Big Tech
The $61 billion Broadcom-VMware deal, announced in May 2022, finally closed last month. Additionally, Adobe and Figma decided to terminate their billion deal, which had been stuck in regulatory limbo since its announcement in September 2022. Notably, CB Insights reported zero deals in Q3 this year from Big Tech, a stark contrast to previous years. For instance, in 2019, there were 10 such deals in Q3, and in 2020, there were eight.
Factors Contributing to the Slowdown
The decrease in major deals from the biggest players can be attributed to several factors, including the high cost of borrowing, which may have dampened the deal-making environment in 2023. This is a significant shift from 2020 when the top deals totaled $165 billion. In contrast, this year’s total amounted to just $67.7 billion, marking the lowest figure since 2019’s all-time low of $40 billion, the second year these top deal lists were compiled.
Role of Private Equity Firms
It’s interesting to note that a considerable number of deals this year involved private equity firms either acquiring companies or selling them off at a substantial profit. Moreover, smaller deals in the realm of AI gained prominence, such as Atlassian’s acquisition of Loom for $975 million, Salesforce’s purchase of Airkit.ai for an undisclosed amount (one of only two small acquisitions this year), and Snowflake’s acquisition of AI search company Neeva, also for an undisclosed amount.
Top 10 Enterprise Deals of the Year
Despite the overall slowdown, several notable deals shaped the enterprise tech M&A landscape this year. From the least to the most costly, here are the top 10 enterprise deals that defined 2023:
- Deal 1
- Deal 2
- Deal 3
- Deal 4
- Deal 5
- Deal 6
- Deal 7
- Deal 8
- Deal 9
- Deal 10
