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Transaction value soars across deal types and regions

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Broadley David
David Broadley

Partner and Global Co-Head, Corporate

London

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Meeus Dirk
Dirk Meeus

Partner and Global Co-Head, Corporate

Brussels

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08 July 2021

While transaction data for the first half of 2021 show an extraordinarily strong year-on-year growth in worldwide deal value, they do compare with the quietest period for transactions in a decade as Covid-19 took hold last spring.
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Nevertheless, with worldwide H1 transaction value up 131%, the figures still clearly indicate that the recovery in global M&A deals, which began in the second half of 2020, is continuing apace, even if deal volume was up by a more modest 29%.

Similar increases are being seen in the value of public target transactions, cross-border, and domestic deals.

Regionally we are seeing a consistent growth across the world, with the exception of Eastern Europe. The U.S. has rebounded strongly, with deal value growing 249%, while APAC (including Japan), Western Europe and Greater China have seen the value of deals rise by 75%, 52% and 53% respectively. The fastest growth has been seen in Latin America and Sub-Saharan Africa, although the latter is from a low base.

SPAC formation fever cools

One counter-trend is the sudden and sharp Q2 slowdown in the formation of U.S. Special Purpose Acquisition Companies (SPACs), after 15 months of explosive growth.

As we discuss in detail in this report, it’s important to distinguish between SPAC formations, and the increasingly urgent efforts by the many SPACs, already created, to find appropriate targets to acquire and take public.

As they look to deploy huge amounts of raised capital, they will continue to be a major driving force of M&A activity in the months ahead.

Outlook

There is every prospect that M&A markets will remain strong as the world edges back towards some kind of normality.

However, the course of the pandemic remains uncertain, and the prospect of higher interest rates is growing. Both could slow the market, as the year progresses.

Graph showing increase in deal value and volume 

Value rises across the board

Megadeals have returned strongly:

 

Graph showing increase in deal value and volume 

Split of global M&A deals by value (USD)

Graph showing increase in M&A deal value and volume in various countries 

% split of total

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% change from H1 2020

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logo for data source company   Data provided by Refinitiv. Note: Figures represent deals announced between 1 January and 30 June 2021. 

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