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TMT sector proves its resilience

In a year of mixed fortunes across sectors, TMT stands out as the one that has proved most resilient during the coronavirus crisis, with deal values growing and with volume flat.

That’s perhaps not surprising given the rapid adoption of online technologies during the pandemic, which has accelerated the trend towards digital transformation in almost all industries.

Shift in focus

By contrast, healthcare, like TMT a powerhouse of activity in recent years, has seen a rapid decline in deal values although a much smaller reduction in deal volumes.

This reflects:

  • A sharp decline in the sort of megadeals that have dominated the sector in recent years
  • A shift in focus by investors towards smaller, bolt-on and consortium deals as investors look to share the risks and rewards of developing and deploying new products and services

Retail and consumer transactions have shown a surprising increase in value. This could reflect an increase in distressed transactions in a sector that has been rocked by the pandemic and where the long-term future remains uncertain.

Yet again, we have seen a familiar pattern develop in most sectors, including financial services, energy and real estate, with deal activity making a robust recovery in the second half of the year. That would seem to bode well for continued recovery in the New Year.

Global M&A by sector, Q4 2020

Graph showing Global M&A by sector Q4 2020

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