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Global M&A volumes hit a new record in 2021, overtaking last year's haul



Global merger and acquisition (M&A) activity has reached new highs, building on the record-breaking dealmaking streak from the beginning of the year that has been aided by low-interest rates and soaring stock prices.

The total value of pending and completed deals announced in 2021 has already touched $3.6 trillion year-to-date, surpassing the full-year tally of $3.59 trillion in 2020, Refinitiv data showed.

So far this year, 35,128 deals have been announced, a 24 percent jump over last year.

"The M&A momentum points to a fundamentally strong market looking ahead. This pace of dealmaking could continue for the next 18-24 months, with new financing solutions and sectors driving activity," said Andrea Guerzoni, global vice chair at Ernst & Young.

The United States alone accounted for $2.14 trillion worth of M&A deals this year, while Europe and the Asia-Pacific raked in $657 billion and $620 billion, respectively.

Analysts said dealmaking from large buyout firms and corporates, which have built up record levels of cash, would further bolster M&A volumes in the near term.

"Private equity firms have nearly $2 trillion in dry powder and there is a similar amount of cash on the balance sheets of the S&P 500. Combine the financial means to do deals with the need to readjust business models to the post-pandemic world, and you'll find organizations increasingly interested in their M&A options," said Jeff Black, partner at Mercer.

The merger between AT&T's Warner Media and Discovery, home to lifestyle TV networks such as HGTV and TLC, is the biggest deal of the year so far, with the enterprise value of the new combined company standing at more than $120 billion.

The latest data from Refinitiv revealed that sectors that are still struggling from the pandemic, such as consumer retail and travel firms, have lagged other acquisitive sectors such as technology and healthcare on M&A activity this year.

The renewable energy sector has raked in about $18 billion worth of deals so far this year, more than twice the M&A volume that was generated last year.

"ESG is increasingly becoming an integral part of investment decisions," said Ernst & Young's Guerzoni.


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