Despite the turmoil unleashed by COVID-19, the global value of M&A was down only 7 percent to US$3.16 trillion in 2020, compared to 2019. That would be a significant decline in most years, but the real story of 2020—an unprecedented year of crash and recovery—is obscured by the top-line number. 

The M&A market hit bottom in the second quarter when global value fell to US$377.27 billion, the lowest quarter since 2009. Yet it rebounded in the second half of the year, reaching US$1,201.75 in Q4, the highest-value quarter since 2015. 

This was a global phenomenon. The US was up 77 percent and Western Europe was up 63 percent in the fourth quarter, compared to Q4 2019. China stood out in that the value of Chinese M&A was up 56 percent for the year as a whole, compared to 2019. 

The technology, media and telecom sector topped the value charts, reflecting major shifts in consumer behavior across the globe. In particular, social distancing practices such as remote working and sheltering at home drove a surge in demand for tech-based solutions in virtually every sector. 

Increasing M&A activity signaled a renewed sense of confidence in the market, as dealmakers looked to position themselves for a post-COVID-19 future. Strong stock market performance led to a surge in all-stock deals, especially in high-growth sectors. And many factors suggest the global M&A market will remain active in 2021. Private equity firms have record levels of dry powder they are eager to deploy, low-cost debt financing is widely available and the IMF expects the global economy to grow at a rate of 5.2 percent.

Many challenges remained at the close of 2020, but we entered 2021 with the promise that vaccine rollouts will precipitate an end to the pandemic. The momentum in the second half of 2020 strengthened our conviction that M&A will be an important factor in the global recovery. 

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