What does it take to scare the CEO of a big company?
What does it take to scare the CEO of a big company? Big tech investment is enough to keep CEOs up at night, as legacy companies struggle to compete with the huge financial clout of the likes of Amazon, Google and Apple. This is tempting companies to make increasingly risky acquisitions in a bid to stay relevant in their respective sectors, James Fontanella-Khan says in this FT video (watch, runtime: 02:19).
The numbers clearly show who’s leading and who’s playing catch up, and the trend spans multiple sectors. After Amazon acquired online pharmacy Pill Pack for less than USD 1 bn last year, rivals Walgreens and CVS immediately lost USD 11 bn in market value, prompting CVS to buy health insurance firm Aetna for USD 69 bn. The threat posed by Netflix resulted in AT&T’s massive USD 108 bn acquisition of Time Warner (owner of HBO and CNN), as well as a bidding war between Disney and Comcast for a majority stake in 21st Century Fox. Such big-name, big-money alliances will become the new normal as the threat posed by tech companies increases, Fontanella-Khan tells us.