Global & Regional M&A Report 2020 – ValueWalk Premium
Global M&A roundup for 2020

Global & Regional M&A Report 2020

Mergermarket has released its Global M&A roundup for 2020, including its financial advisors league tables. Take a look at the report HERE and don’t forget to review the charts breaking down the activity by sector, value, year-to-year analysis, etc.

Q3 2020 hedge fund letters, conferences and more

A couple key findings include:

  • After a roller coaster year, the US M&A market made significant leaps on the road to recovery in 4Q20. With 5,243 deals worth USD 1.3tn, M&A activity for the year still ended down 21% by value compared to 2019 (6,239 deals worth USD 1.6tn).
  • Gains seen in the second half recovered much of the ground lost at the start of the pandemic. There were 2,709 deals worth USD 961.4bn announced in H2, up over 200% by value with roughly the same number of deals compared to H1 (2,474 deals worth USD 296bn).
  • The Technology and Telecommunications sectors have been a bellwether of M&A this year, with 1,289 deals announced worth USD 385.6bn in 2020, up 57% by value compared to 2019, (1,300 deals worth USD 245bn).
  • There have been 248 SPAC IPOs in the US in 2020 that raised a combined USD 82.4bn, equivalent to a 6x increase on 2019 (USD 13.4bn across 59 listings).

Global Overview

Regional M&A Comparison

Global M&A roundup for 2020

Global

Global M&A roundup for 2020

With the New Year, dealmakers hopefully look towards the future. But even as 2020 recedes into the distance, its impacts continue to shape the market. Corporates and sponsors alike have spent their way through the crisis in the second half of 2020, with unprecedented levels of deal making in the final few months of the year. The USD 2.2tn of overall M&A activity in 2H20 represented the highest halfyear figure on Mergermarket record, while the USD 1.2tn announced in the final quarter was the highest quarterly value since 2Q07.

In contrast, activity in the first half was unsurprisingly subdued (USD 971.0bn), leading to an overall 6.6% year-on-year decline by value. Amid the social and economic disruptions caused by COVID-19, deal count was down 15.5%, from 20,767 to 17,545. While a few sectors fell, others rose, making it a bumpy ride for deal professionals.

Although M&A markets went into stasis, debt and equity capital markets came alive. In addition to a significant volume of high yield bond issuances and secondary equity offerings, special purpose acquisition companies (SPAC) became the phenom of 2H20, particularly in the US. A total of 255 SPACs were launched in 2020, raising USD 83.1 bn, compared to USD 15.5bn across 73 listings in 2019, according to Dealogic data (Mergermarket and Dealogic are owned by ION Group).

Not all companies could find the needed capital, however. Insolvencies and bankruptcy filings climbed steadily through the year – Debtwire Restructuring data show a 33% yearon- year increase in US filings, from 240 to 319. Debtwire is Mergermarket’s sister publication.

M&A journey through the year

The year started off slow in January, particularly in terms of deal values, but recovered to a degree over February and March. Deal count continued sliding until April, when the bottom fell out. As COVID-19 shutdowns took hold, activity dropped to levels not seen since the Global Financial Crisis.

Showing impressive resilience, M&A activity bounced back in late spring and early summer, with July setting the tone for the rest of year. September was the single most active month in 2020 (USD 415.6bn) with a surge of large, multi-billion dollar transactions.

Regional activity

The biggest gainer in 2020 was Asia (including Japan), which saw its global market share rise in both value and volume (up by 7.4% and 2.2% respectively). Europe also saw its share of global deal value increase to 26.8% (from to 23.7%) while registering a small decline in overall deal count. North America, which had seen its global market share steadily rising over the years, saw its deal value decline substantially (from 50.5% to 41.9%) while remaining the same on deal count (33.3%).

If there was a “winner” in 2020, it was mega deal professionals. Deals of USD 5bn or greater experienced an impressive surge, increasing from 91 in 2019 to a total of 111 in 2020, with 79 of them occurring in the second half. This represented the second highest number of such large deals since 2007, only behind 2015 (127 deals).

Meanwhile, smaller-sized transactions saw double digit declines across the board. In particular, deals under USD 250m experienced a 12.1% decline in value and 1,270 fewer transactions compared to 2019.

Sectors activity mixed bag

On the back of the trends magnified by the pandemic, Technology, Media, & Telecommunications (TMT) climbed 56.8% by value compared to the previous year, from USD 543.4bn to USD 851.8bn, equivalent to more than a quarter of overall global activity. Volume on the other hand declined slightly to 3,943 deals.

The next best performing sector was Energy, Mining & Utilities (EMU), which also saw a 3.8% increase by value to USD 477.7bn but a 13.8% decline in deal count to 1,326.

Industrials & Chemicals rounds up the three best performing sectors in 2020, showing however a 27.1% drop to the previous year – from 3,791 to 3,023 transactions.

Private Equity resilience

In spite of the pandemic, global private equity investment, buoyed by a reported dry-powder of USD 1.7tr, climbed to its highest annual value since the Global Financial Crisis. In total, USD 608.7bn was spent by PE firms in 2020 across 3,509 deals, 3.3% up on the 2019 (USD 589bn).

After a clear decline in the number of deals in the second quarter in the wake of the pandemic, activity in 2H20 matched the average half-year deal volumes of recent years. On deal count, private equity buyouts dipped 7.4% versus an 18.8% fall in terms of total M&A. Sponsors were involved as bidders in just over a quarter of all M&A deals globally – the highest annual figure on Mergermarket record.

Private equity firms have continued to invest in innovative techrelated assets. Technology remained the most active sector for sponsor-led investment, reaching 913 deals valued USD 158.7bn compared to USD 117.8bn across 845 deals last year. Pharma, Medical & Biotech was also in the spotlight for PE firms, with 436 deals worth USD 70.6bn, passed last year’s volume (374 deals) and reaching its highest overall deal volume on record. With firms reinventing products and services to combat the effects of the pandemic, median EBITDA figure for buyouts stand at 12.1x, around the same level as 2019 – despite previous projections that valuations would fall due to the crisis.

“Even as 2020 recedes into the distance, its impacts continue to shape the market” – Mark Druskoff, Data-Driven Content, Coordinator

Global M&A roundup for 2020

Global M&A roundup for 2020

Global M&A roundup for 2020

Global League tables

Global M&A roundup for 2020

Global Private Equity – Buyouts

Global M&A roundup for 2020

Global Private Equity – Exits

Global M&A roundup for 2020

Buyouts – Sectors & Multiples

Global M&A roundup for 2020

Global Private Equity League tables

Global M&A roundup for 2020

Global M&A roundup for 2020

Read the full report here by Merger Market


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