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Tech Data Acquires Avnet

Circa 2016 has panned out to be a year of major consolidation in the Information Technology industry with mergers and acquisitions ruling the roost. The channel business too has been impacted by these movements with the latest such news coming from the United States of America. Tech Data Corporation is buying Arizona based Avnet for a mammoth $2.6 billion, making it the third such deal in the distribution business during this year. Earlier this February, Chinese group Tianjin Tianhai acquired world’s largest ICT distribution company, Ingram Micro for approximately $6.0 billion. Exclusive Group, the global value-added services and technologies (VAST) group, bought Singapore based cyber security and infrastructure VAD, Transition Systems.

The mergers and acquisitions of technology companies were widespread this year, especially in the security domain. While Symantec strengthened its position in the security business by acquiring Blue Coat for approximately $4.651 billion, Avast bought over rivals AVG Technologies for $1.3 billion. Dell and EMC recently concluded their much talked about merger to create $74 billion entity. Once a rival, HP also announced their decision to buy Samsung’s printing business for $1.05 billion.

While acquisitions of small scale players and rivals help the big technology players become more powerful in the industry, it also gives new wings to prospering startups. The same trend is now visible in the distribution business. Big distribution houses are acquiring regional players to step into the new growth markets and expand their channel base. Avnet’s acquisition is a strategic step of Tech Data Corporation which aims to establish a foothold in the prospering Asia region.

The channel is always very sensitive to such consolidations. The mergers and acquisitions result in a massive reshuffle in the leadership of the company, most of the times, channels are not preparing for the transition. Similarly, such consolidations also lead to changes in the channel policy.

The deal is said to make sense because Avnet and Tech Data have different geographic, vendor, and technology strengths.

28-Sep-2016 08:26:10
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