This is a really interesting article. It mentions Alphabet's Acquisition of Motorola Mobility in 2012 and the perceived failure to integrate Motorola Mobility into Alphabet. I remember that Alphabet would later sell Motorola to Lenovo for substantially less, 3 billion, than what it acquired it for, 12.5 billion, but my understanding of the Motorola deal was that Alphabet didn't necessarily have the intention of integrating Motorola into Alphabet from an operations standpoint: the intention was a defensive maneuver to protect itself from patent litigation from Cisco and Apple related to wireless technology and smartphone technology. My understanding of Alphabet's acquisition and divestiture of Motorola is that Alphabet acquired Motorola for it's patents, which it kept as part of Alphabet, and when it sold Motorola to Lenovo, it was basically just selling Lenovo the Motorola trademark: Lenovo would probably have a better idea of what to do with a legacy brand like Motorola than Alphabet would, Lenovo's brand lineup includes ThinkPad, formerly owned by IBM.
Looking at a list of Alphabet's previous acquisitions, my guess is that the most successful acquisition it has ever made would probably be YouTube. I'm interested in seeing how Alphabet's past acquisitions will inform it's approach to Wiz. Just from other articles I read about the Wiz acquisition, Alphabet previously attempted to acquire Wiz in 2024 for 23 billion USD, and this 32 billion USD offer is a second attempt. Wiz went as far a a Series E Venture Capital funding round before Alphabet's first attempt at acquiring Wiz in 2024. The largest publicly traded cyber security company I could find is Palo Alto Networks with a market cap of 125 billion USD, with the largest cyber security firm in Israel being Check Point Software with a market cap of 24 billion USD. The article mentioned the potential regulatory, the antitrust hurdles that Alphabet may face in it's attempt to acquire Wiz and it would be interesting to see what approach Alphabet takes in the event that the deal falls though yet again: would Alphabet seek a controlling interest in Wiz as an alternative to an outright acquisition? Either through a Series F round? or even post-IPO? Would Alphabet take a step-acquisition approach until a more desirable regulatory environment develops, and then acquire Wiz in its entirety?
Wiz itself is an interesting situation as well.
Summary: Toyota Motor Corporation Seeks to Acquire Toyota Industries Corporation in a deal valued at 42 Billion USD. The Toyota Industries Corporation is a supplier to the Toyota Motor Corporation. The Toyota Motor Corporation is a spin-off of the Toyota Industries Corporation formerly known as Toyota Automatic Loom Works.
Why I Found It Interesting: Both Toyota Motor and Toyota Industries are traded in the United States as American Depository Receipts. I experimented with American Depository Receipts (ADRs) years ago and I think that I was trying to figure out something related to dividends issued by companies domiciled outside of the United States, as well as experimenting with things like indexing and country and sector allocations, and foreign currency exposure, and writing options contracts on ADRs, and I remember coming across a problem with Mitsubishi: Mitsubishi Financial Group is one company, and Mitsubishi Heavy Industries is another company, and the car company is yet another company; there also seems to be a chemical company, an energy company, and a real estate holding company that have Mitsubishi in it's name. Mitsubishi Financial has ADRs listed on the NYSE and an options chain, but Mitsubishi Heavy Industries has it's shares traded over the counter, and does not have an options chain. I had the same problem with Sumitomo.
There were a number of other issues related to ADRs that I came across, such as being cognizant of the ADR sponsoring financial institution, and what fees they charged, and how an ADR represents a fraction of, or multiple of the original shares. Related to the Toyota example, Toyota Motor has ADRs listed on the NYSE, but shares of Toyota Industries are traded over the counter in the United States. There was another issue I came across with ADRs and it was when Credit Suisse was acquired by UBS, but I don't remember exactly what the issue was, I don't know if I was issued cash or shares, and I think there was a shareholder lawsuit related to the acquisition that I didn't participate in, but remember receiving a letter about.
The Toyota Motor acquisition reminds me of the historical example of the breakup, and later re-consolidation of the Standard Oil companies: Unocal and Texaco would merge into Chevron, Exxon and Mobil would merge into ExxonMobil, Amoco and Sohio would merge into BP, and BP is currently looking to acquire Shell. AT&T and the Bell Operating Companies would be another historical example, with the merger of Verizon and Frontier Communications being the most recent evolution of that story.
It is also interesting to note that the Toyota Motors Corporation is originally a divesture from the Toyota Industries Corporation, and now the spin-off, Toyota Motor, is buying out it's former parent, Toyota Industries. This would be similar to Amazon.com Incorporated spinning off Amazon Web Services Incorporated, and Amazon Web Services later buying Amazon.com. I think Amazon Web Services is the largest component of Amazon.com, and Amazon.com is the largest customer of Amazon Web Services.
How It Relates to Course Material: Chapter 1: Value Chain and Supply Chain motivations for acquisitions. Toyota Motor is acquiring a supplier, and not a competitor. Chapter 2: Consolidation of Financial Information Chapter 4: step acquisitions, divestiture and subsequent reacquisition, Toyota Motors probably held an ownership stake in Toyota Industries beforehand, and the article briefly mentions the Seven & i holdings situation, where I would guess the family office in question probably held a stake in Seven & i holdings before attempting the management buyout, the assignment of book and fair market values to various components of an acquisition, financial disclosure and reporting of controlling and non-controlling interest, it's possible that Toyota Motor has it's current holdings in Toyota Industries in it's consolidated financial statements Chapter 5: Inventory transfers, intra-entity inventory transactions. transfer pricing, revenue recognition of inventory transactions Chapter 6 - 8: Variable Interest Entities, Going from a Variable interest entity to a wholly owned subsidiary, Segment Reporting, Chapter 9, 10, 13: foreign currency transactions, and reporting requirements for transactions denominated in foreign currency, the acquisition of Deliveroo by DoorDash, and Amazon's step-down divestitures of it's stake in Deliveroo might be a slightly better example of the type of foreign currency transactions we performed in class, but the Toyota Motor Toyota Industries deal is also a good example considering they have subsidiaries in North America, accounting for legal reorganizations.
LinkedIn Learning: Similar to the DuPont, Dow Chemical, DowDupont, Corteva example, and the General Electric, Synchrony, Vernova, GE Healthcare, GE Aerospace, example, both mentioned in the second LinkedIn Learning Module assigned. The M&A due diligence process mentioned in the first LinkedIn Learning module, due diligence is probably easy for Toyota Motor since they've been doing business with Toyota Industries for nearly a century.
My classmates discussed the governance complexities, the political, regulatory, and public interest complexities of repositioning the United States as the dominant player in global manufacturing, and it's possible that mergers, acquisitions, and divestitures are part of the solution, either as an alternative to, or in conjunction with the Subsidies, Tariffs, and Currency Control approaches that have been tried. Divesting a segment to allow it to develop and focus on it's key strengths the way Toyota Automatic Looms spun off Toyota Motors, and then acquiring a supplier when doing so will improve operation efficiencies, such as the current situation where Toyota Motors is acquiring Toyota Industries.
Links & References: https://www.fidelity.com/news/article/company-news/202504250626RTRSNEWSCOMBINED_KBN3GX0S0-OUSBS_1
Looking at a list of Alphabet's previous acquisitions
This is a really interesting article. It mentions Alphabet's Acquisition of Motorola Mobility in 2012 and the failure to integrate Motorola Mobility into Alphabet. I remember that Alphabet would later sell Motorola to Lenovo for substantially less, 3 billion, than what it acquired it for 12.5 billion, but my understanding of the Motorola deal was that Alphabet didn't necessarily have the intention of integrating Motorola into Alphabet from an operations standpoint: the intention was a defensive maneuver to protect itself from patent litigation from Cisco and Apple related to wireless technology and smartphone technology. My understanding of Alphabet's acquisition and divestiture of Motorola is that Alphabet acquired Motorola for it's patents, which it kept as part of Alphabet, and when it sold Motorola to Lenovo, it was basically just selling Lenovo the Motorola trademark: Lenovo would probably have a better idea of what to do with a legacy brand like Motorola than Alphabet would, Lenovo's brand lineup includes ThinkPad, formerly owned by IBM.
Looking at a list of Alphabet's previous acquisitions, my guess is that the most successful acquisition it has ever made would probably be YouTube. I'm interested in seeing how Alphabet's past acquisitions will inform it's approach to Wiz. Just from other articles I read about the Wiz acquisition, Alphabet previously attempted to acquire Wiz in 2024 for 23 billion, and this 32 billion offer is a second attempt. Wiz went as far a a Series E Venture Capital funding round before Alphabet's first attempt at acquiring Wiz in 2024. The largest publicly traded cyber security company I could find is Palo Alto Networks with a market cap of 125 billion, with the largest cyber security firm in Israel being Check Point Software with a market cap of 24 billion. The article mentioned the potential regulatory, the antitrust hurdles that Alphabet may face in it's attempt to acquire Wiz and it would be interesting to see what approach Alphabet takes in the event that the deal falls though yet again: would Alphabet seek a controlling interest in Wiz as an alternative to an outright acquisition? Either through a Series F round? or even post-IPO? Would Alphabet take a step-acquisition approach until a more desirable regulatory environment develops, and then acquire Wiz in its entirety?
Summary: Toyota Motor Corporation Seeks to Acquire Toyota Industries Corporation in a deal valued at 42 Billion USD. The Toyota Industries Corporation is a supplier to the Toyota Motor Corporation. The Toyota Motor Corporation is a spin-off of the Toyota Industries Corporation formerly known as Toyota Automatic Loom Works.
Why I Found It Interesting: I experimented with American Depository Receipts (ADRs) years ago and I think that I was trying to figure out something related to dividends, as well as experimenting with things like indexing and country and sector allocations, and foreign currency exposure, and writing options contracts on ADRs. I remember coming across a problem with Mitsubishi: Mitsubishi Financial Group is one company, and Mitsubishi Heavy Industries is another company, and the car company is yet another company. There also seems to be a chemical company, an energy company, and a real estate company that has Mitsubishi in it's name. Mitsubishi Financial has ADRs listed on the NYSE and an options chain, but Mitsubishi Heavy Industries has it's shares traded over the counter, and does not have an options chain. I had the same problem with Sumitomo.
There were a number of other issues related to ADRs that I came across, such as being cognizant of the ADR sponsoring institution, and what fees they charged, and how an ADR represents a fraction of, or multiple of the original shares. Related to the Toyota example, Toyota Motor has ADRs listed on the NYSE, but shares of Toyota Industries are traded over the counter in the United States. There was another issue I came across with ADRs and it was when Credit Suisse was acquired by UBS, but I don't remember exactly what the issue was, I don't know if I was issued cash or shares, and I think there was a shareholder lawsuit related to the acquisition that I didn't participate in, but remember receiving a letter about.
The Toyota Motor acquisition reminds me of the historical example of the breakup, and later re-consolidation of the Standard Oil companies: Unocal and Texaco would merge into Chevron, Exxon and Mobil would merge into ExxonMobil, Amoco and Sohio would merge into BP, and BP is looking to acquire Shell. AT&T and the baby bells would be another historical example, with the merger of Verizon and Frontier Communications being the most recent evolution of that story.
It is also interesting to note that the Toyota Motors Corporation is originally a divesture from the Toyota Industries Corporation, and now the spin-off is buying out it's former parent. This would be similar to Amazon.com Incorporated spinning off Amazon Web Services Incorporated, and Amazon Web Services later buying Amazon.com. I think Amazon Web Services is the largest component of Amazon.com, and Amazon.com is the largest customer of Amazon Web Services.
How It Relates to Course Material: Chapter 1: Value Chain and Supply Chain motivations for acquisitions. Toyota Motor is acquiring a supplier, and not a competitor. Chapter 2: Consolidation of Financial Information, Chapter 4: divestiture and subsequent reacquisition, step acquisitions, Toyota Motors probably held an ownership stake in Toyota Industries beforehand, and the article briefly mentions the Seven & i holdings situation, where I would guess the family office in question probably held a stake in Seven & i holdings before attempting the management buyout, the assignment of book and fair market values to various components of an acquisition, financial disclosure and reporting of controlling and non-controlling interest, it's possible that Toyota Motor has it's current holdings in Toyota Industries in it's consolidated financial statements Chapter 5: Inventory transfers, intra-entity inventory transactions. transfer pricing. revenue recognition of inventory transactions Chapter 6 - 8: Variable Interest Entities, Going from a Variable interest entity to a wholly owned subsidiary, Segment Reporting, Chapter 9, 10, 13: foreign currency transactions, and reporting requirements for transactions denominated in foreign currency, accounting for legal reorganizations.
LinkedIn Learning: Similar to the DuPont, Dow Chemical, DowDupont, Corteva example, and the General Electric, Synchrony, Vernova, GE Healthcare, GE Aerospace, example. The M&A due diligence process, it's probably easy for Toyota Motor since they've been doing business with Toyota Industries for nearly a century.
Giselle Calva Terrones in Discussion 2 and Ngoc Le in Discussion 3 discussed the governance complexities of repositioning the United States as the dominant player in global manufacturing, and it's possible mergers, accusations, and divestitures are part of the solution. Divesting a segment to allow it to develop and focus on it's key strengths the way Toyota Automatic Looms spun off Toyota Motors, and then acquiring a supplier when doing so will improve operation efficiencies, such as the current situation where Toyota Motors is acquiring Toyota Industries.
Links & References: https://www.fidelity.com/news/article/company-news/202504250626RTRSNEWSCOMBINED_KBN3GX0S0-OUSBS_1
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