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Elon Musk buys Twitter, its value is in the top 10 biggest acquisitions in history!

Musk spent as much as US $ 21 billion to take over Twitter and plans to turn it into a private company. While the rest is a loan. Part of the loan, worth US $ 12.5 billion he got by making his stake in Tesla as collateral.

Quoted from Statista, the company's buying model is known as leveraged buyouts (LBOs). Prospective buyers usually use their assets and the assets of the target company as collateral for additional capital to acquire the target company. Then the buyer will use the income stream of the company he bought to cover his debt.

With the LBOs model, buyers do not need to spend a lot of capital to buy a company. This model is not new in the business world. One of the largest LBOs in history was the acquisition of American cigarette and snack food company RJR Nabisco in 1989.

RJR Nabisco was acquired by global investment firm Kohlberg Kravis Roberts for US$31 billion. Nominally, of course the value is less than the Twitter acquisition deal. But taking into account the inflation rate, the value is still the largest in history. In 2022, the transaction value is equivalent to US$ 71.9 billion.

To calculate the historical increase in the value of the list of LBOs based on the inflation rate, Tempo uses the online calculator US Inflation Calculator.

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