27 May 2021
Posted in Thematic Research
Global M&A activity increased by 48% in Q1 2021 by deal value as compared to Q1 2020, says GlobalData
A total 8,823 merger and acquisition (M&A) deals were announced in Q1 2021, with a combined transaction value of $878bn, according to GlobalData, a leading data and analytics company. This is a jump of 48% in deal value compared to Q1 2020. M&A activity recovered in the second half of 2020 and this strong momentum continued in the current year.
The company’s latest report, ‘Global M&A deals in Q1 2021-Top themes by sector’, notes the key themes that have driven M&A activity in Q1 2021 across 17 sectors.
Snigdha Parida, Analyst for Thematic Research at GlobalData, commented: “Tech, media and telecom (TMT) stands top in terms of both M&A deal value and volume, among all sectors. It accounted for 37% of all deals with a combined transaction value of $323.1bn in Q1 2021.The most notable themes driving deals in the majority of sectors in Q1 2021 were noted to include connectivity, big data, cloud, COVID-19, cybersecurity, drug development, digital banking, health & wellness and digitalization.”
Despite the global pandemic, global M&A deals reached a total value of $2.8 trillion in 2020, just down by 6% as compared to 2019. The total number of deals in 2020 reached 32,285 with most activity in the second half of the year.The M&A market recovered strongly in Q3 and Q4 2020. Q4 2020 saw the highest activity for the past five years, with 9,371 deals and total deal value of $1 trillion.
Parida adds: “2020 was a landmark year for M&A activity and this is expected to continue at a high level throughout in 2021, as companies across sectors focus on their key technologies and adjust to the realities of the COVID-19 pandemic.”
The pandemic has been a catalyst for M&A activity, especially in the medical devices, healthcare and pharma sectors. The medical devices sector registered the highest growth in deal value in Q1 2021, when compared to Q1 2020. It was followed by healthcare, which saw 608% growth. Pharma on the other hand recorded the highest growth in terms of the number of M&A deals in Q1 2021, followed by the medical devices sector.
Parida continues: “Companies in the medical, healthcare and pharma sectors have been evaluating their strategic priorities and existing portfolio to manage the longer-term pandemic COVID-19 impacts by investing in digitalization or divestments.
“In contrast, the foodservice, consumer, retail, and construction sectors recorded a drop in M&A activity in terms of deal value recorded in Q1 2021 compared to the same quarter last year.”