M&A Activity Hits All Time High in 2021; 2022 Off to An Impressive Start!
Posted by | Nilesh Sharma
Global M&A activity reached an all-time high in 2021 – the number of deals topped over 62,000 while transaction volumes were an impressive US$5.1 trillion, according to data from service providers Dealogic and Refinitiv. The US market accounted for most of this activity with a transaction value of over US$2.9 trillion. While a large part of this elevated deal activity was driven by the pent-up demand from 2020 when deal activity hit historic low, favorable macroeconomic conditions such as low-interest rates, concerns over a potential increase in capital gains tax and a higher demand for technology and data-driven solutions contributed to increased transaction value and volumes. The number of large deals (deal value of US$5 billion or more) also increased as corporate, private equity and special purpose acquisition companies (SPACs) remained active.
Chart : Global & US deal value and volumes
Chart : Bubble Chart (Global, US, EMEA and Asia) 2021 deal values
The US middle market too followed suit with private equity transaction value of over US$1.2 trillion through a record 8,600+ deals! Indeed, the ‘dry powder’ or unallocated capital available for deployment stood at US$2.3 trillion at the end of 2021, 14% higher than the previous year. The venture capital deal making activity more than doubled to over US$621 billion in 2021 from around US$290+ billion in the previous year, according to data from Pitchbook.
Chart : US middle market deal value and volumes
2022 has already started on a high note with over US$120 billion worth of large transactions announced in January 2022 alone! Microsoft’s US$69 billion acquisition of Activision Blizzard accounts for over half of this. The middle market space too remains active with companies actively looking to take advantage of elevated valuation levels.
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