M&A deals spike in second half as firms strive to stay afloat – Times of India
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NEW DELHI: Global merger and acquisition (M&A) activity clawed its way back from near-decade lows in 2020, facing down the pandemic with a string of large transactions in the second half of the year that dealmakers hope will continue.
Deal volumes are now down about 6% for the year to $3.5 trillion, according to data compiled by Bloomberg. Still, the fact that about two-thirds of those were inked since the start of July has advisers talking about a dramatic comeback, after the first half of 2020 froze M&A and sent North American deal activity down more than 50%.
How transactions got done also changed, as bidders flew drones to conduct due diligence and the head of a UK pharmaceutical giant inked his biggest-ever deal while quarantined in a hotel room in Australia. Globe-trotting bankers transitioned to video calls, either from home or nearly empty offices.
Advisers described 2020 as a tale of two very different halves. “We saw a sharp decline in M&A activity after the outbreak of the pandemic but then a very strong recovery in the second half of the year,” said Berthold Fuerst of Deutsche Bank.
As the pandemic shut down cities in the first quarter, the chaos left CEOs too busy to make acquisitions, and deal making got off to the slowest start since 2013. Instead of opportunistic mergers, most of the deals that were struck helped companies stay afloat, particularly the travel, hospitality and entertainment businesses hit hard by lockdowns. Airlines sought federal aid while others secured private equity investment.
Deal volumes are now down about 6% for the year to $3.5 trillion, according to data compiled by Bloomberg. Still, the fact that about two-thirds of those were inked since the start of July has advisers talking about a dramatic comeback, after the first half of 2020 froze M&A and sent North American deal activity down more than 50%.
How transactions got done also changed, as bidders flew drones to conduct due diligence and the head of a UK pharmaceutical giant inked his biggest-ever deal while quarantined in a hotel room in Australia. Globe-trotting bankers transitioned to video calls, either from home or nearly empty offices.
Advisers described 2020 as a tale of two very different halves. “We saw a sharp decline in M&A activity after the outbreak of the pandemic but then a very strong recovery in the second half of the year,” said Berthold Fuerst of Deutsche Bank.
As the pandemic shut down cities in the first quarter, the chaos left CEOs too busy to make acquisitions, and deal making got off to the slowest start since 2013. Instead of opportunistic mergers, most of the deals that were struck helped companies stay afloat, particularly the travel, hospitality and entertainment businesses hit hard by lockdowns. Airlines sought federal aid while others secured private equity investment.
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