COVID-19 depressed TMT M&A deals activity by 40% in H1 2020

COVID-19 was responsible for a 40% drop in the number of mergers and acquisitions (M&As) announced in the technology, media, and telecom (TMT) sector in the first six months of 2020, says GlobalData, a leading data and analytics company.

The company’s latest Thematic Research report, M&A in TMT – Review of H1 2020, reveals that 253 M&A deals with a transaction value of $50m or more were announced in the first half or 2020, which was down 40% on H1 2019. The combined transaction value for the first six months of 2020 was $216.6bn, a drop of 24% from $285bn in H2 2019, and 51% down on the same period last year, primarily due to the COVID-19 pandemic. The volume of deals in Q2 2020 was lower than any quarter over the last five years.

Connectivity, fintech, cloud, ecommerce and big data were the top five themes driving M&A in the TMT sector in the first six months of 2020, accounting for $161.9bn, or 75%, of deal value.

Snigdha Parida, Thematic Research Analyst at GlobalData, comments: “As COVID-19 redefines business priorities, it is important for companies to focus not only on the themes that are important for the short-term, but also invest in themes that would enable them to become more resilient and responsive in the longer term.”

COVID-19 has considerably hastened the shift towards digitalization across several industries. There has been an increased demand for laptops, broadband and video conferencing.

Parida continues: “Post-COVID-19, many businesses will continue to use these technologies as their employees and customers become more accustomed to working remotely. Many companies, including Infosys, Square and Twitter, are considering adopting permanent remote working models to ensure employee safety. These shifts are increasing the relevance of technology themes such as cloud, connectivity, cybersecurity, IoT and digital media.”

Information based on GlobalData’s report: M&A in TMT – Review of H1 2020

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