How to build a global business empire in the 21st century
afflicts rich and poor countries alike. With barriers to commerce rising, high interest rates contining to bite and regulators bridling at takeovers, such liaisons are becoming the go-to way to enlarge a business empire, as the recent actions of companies including Disney, Ford and Microsoft illustrate. Call it the age of the quasi-merger.
When the scope of co-operation is clear, firms often choose to share ownership of a separate entity through a JV. In February Disney announced a new sports-streaming service bringing together its ESPN network with the content of two rivals, Fox and Warner Bros Discovery. Weeks later it made a similar move in India, joining forces with Reliance, a giant Indian conglomerate, in an $8.5bn deal.
Many constructs are fuzzier. Microsoft has forged partnerships with some of the hottest makers of AI models: OpenAI of San Francisco, Mistral of Paris and, this month, G42 of Abu Dhabi. The investments give the world’s most valuable firm minority stakes in Mistral and G42.
After backing OpenAI to the tune of $13bn, it holds a non-controlling interest in the ChatGPT-maker’s for-profit subsidiary. In February Ford, an American carmaker, joined forces with CATL , a Chinese battery giant, to build a $3.5bn battery factory in Michigan. CATL would bring the know-how via a licensing deal, but not own a stake in the project.
If TikTok’s Chinese owner, ByteDance, sells the app rather than shutting up shop in America, as a new law dictates, the short-video time-sink may end up in the hands of a consortium of Western firms. Quasi-mergers are not new. Firms have long teamed up to manage project costs, new technologies and manufacturing-obsessed governments.
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