Aim: The aim of this study is to highlight strategic importance of intellectual property (IP) in mergers and acquisitions (M&A) deals.
Objectives: - Provide an overview of the key role that IP assets and IP due diligence play in M&A deals, along with financial due-diligence. - Provide an overview of recent IP-driven deals*. - Provide a strategic overview of recent IP-driven M&A deals in the communication sector. - Case study: Google’s acquisition of Motorola Mobility Inc. - Provide a strategic overview of recent IP-driven M&A deals in the pharmaceuticals sector. - Case Study: Pfizer’s acquisition of Wyeth
- The technology landscape continues to change very rapidly to meet customer and market needs. Technology companies are trying to build scale to take advantage of shifting customer expectations and defend their position in the market. To address these challenges rapidly, “buy versus build” decisions generally result in “buy”. - Intellectual property assets (specifically patent portfolio volume and strength) are increasingly becoming key factors in technology driven M&A deals. Also, IP assets are key drivers for M&A activity in IP-intensive industries, such as, pharmaceuticals, biotechnology, Information and communication technology, semiconductors, and chemicals and materials. - The following recent IP-driven deals pinpoint the key role played by IP in M&A: - Acquisition by Rockstar Consortium (made up of Apple, Microsoft, RIM, Ericsson, EMC, and Sony) of a substantial majority of the former Nortel Networks patent portfolio (about x patent assets related to a broad array of networking, communications, and so on) for an amount of $ x billion. Google also participated in this auction, but was outbid by the Rockstar Consortium and failed to acquire the portfolio. - Acquisition of Motorola Mobility by Google Inc. for a deal of $ x billion gave the acquirer control of Motorola’s impressive portfolio of patents. Later, Google sold Motorola Mobility to Lenovo, but retained ownership of the vast majority of Motorola Mobility’s patent portfolio. Google’s main drive for the Motorola purchase was patents. There are many benefits that the wide range of MMI patents brings to Google, from both defensive and offensive perspectives. - Pfizer’s acquisition of Wyeth at $64 billion to offset losses due to expiry of Pfizer’s patents.
Role of Intellectual Property Business Intelligence (IP BI)in Strategic Decision-Making Scenarios
R&D and Technology Transfer •Prioritization of Technology Licensing Targets •Potential Application Analysis •IP Awareness of R&D Team
Investment Decisions •Technology Due Diligence • IP Valuation and Analysis • Application Analysis
Business Development •Stakeholder Analysis • Funding Analysis • Value Chain Analysis • White Space Analysis • Technology Road Mapping • Potential Application Analysis
Commercialization • Application Analysis • Commercialization Strategy •Trademarks and Brand Value •Funding Analysis •Potential Application Analysis
Table Of Contents
Strategic Importance of Intellectual Property (IP) in MandA : Insights and Case Studies Research Scope 3 Executive Summary 4 Strategic Importance of Intellectual Property 5 Recent IP Driven Mergers and Acquisitions 8 Case Study 1 - Google's Acquisition of Motorola Mobility 11 Case Study 2 - Pharmaceutical and Biotechnology Sector 23 Case Study 3 - ArcelorMittal's Patent Dispute with Voestalpine 32 Appendix 37 The Frost and Sullivan Story 39