A total of 6,423 deals were announced globally during July 2020, which is an increase of 16.6% over 5,507 deals announced during the previous month, according to GlobalData, a leading data and analytics company.
GlobalData’s Financial Deals Database also reveals that deal volume during the month remained above the first quarter (Q1) of 2020 and Q2 monthly average levels.
Aurojyoti Bose, Lead Analyst at GlobalData, comments: “Deal activity across all markets has remained inconsistent since the COVID-19 outbreak. However, the growth witnessed during July marks the second consecutive month of growth after four straight months of decline. This is a positive sign and indicates a revival of optimism for deal making in some of the key markets.”
The growth in July was primarily driven by heightened deal activity in the Asia-Pacific (APAC) region. The number of deals announced in the APAC region increased by 23.2% from 1,653 in June to 2,037 in July. Key APAC markets such as China, Australia and South Korea witnessed an increase in deal volume by 32.3%, 18.4% and 40.0%, respectively, during July compared to the previous month. These markets were able to control the spread of coronavirus infection effectively and regain confidence for deal making, thereby witnessing an improvement in deal activity. Other countries such as the US and Germany also witnessed an increase in deal volume by 12.7% and 26.1%, respectively.
On the other hand, the UK and Japan witnessed decline in deal activity by 1.6% and 3%, respectively. The resurgence of news cases in Japan raised concern, while several media reports indicating the UK falling into recession started surfacing in July, which has dented the deal making sentiments.
Most of the deal types also witnessed an increase in volume during July compared to the previous month. Private equity, venture financing and M&A deals volume increased by 12.2%, 15.6% and 25.4%, while the number of equity offerings and licensing agreement deals increased by 27.1% and 32.7%, respectively. However, partnerships and debt offerings deal volume declined by 12% and 5.2%, respectively.