3 years ago

Global mergers and acquisitions volume hits historic $5.8T this year

The United States led the way for M&A, accounting for nearly half of global volumes.

Reuters

Despite a slowdown in activity in the second half, dealmaking involving special purpose acquisition companies further boosted M&A volumes in 2021.

Global merger and acquisition (M&A) volumes in 2021 have topped $5 trillion for the first time ever as easy availability of cheap financing and booming stock markets fueled the activity.

Dealogic data showed on Friday that the volumes comfortably eclipsed the previous record of $4.55 trillion set in 2007.

The overall value of M&A stood at $5.8 trillion in 2021, up 64 percent from a year earlier, according to Refinitiv.

Flush with cash and encouraged by soaring stock market valuations, large buyout funds, corporates and financiers struck 62,193 deals in 2021, up 24 percent from the year-earlier period, as all-time records tumbled during each month of the year.

Dealmaking frenzy to continue

Investment bankers said they are expecting the dealmaking frenzy to continue well into next year, despite looming interest rate hikes.

Higher interest rates increase borrowing costs, which may slow down M&A activity. However, deal advisers still expect a flurry of large mergers in 2022.

Accommodative monetary policies from the US Federal Reserve fuelled a stock market rally and gave company executives access to cheap financing, which in turn emboldened them to go after large targets.

SOURCE: TRTWorld and agencies