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Record breaker: US M&A 2021

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US M&A had an extraordinary year in 2021, with total deal value reaching US$2.6 trillion—surpassing US$2 trillion for the first time

M&A roars into 2022 on momentum of a record-shattering year

Challenges loom—including the possibilities of tighter regulations, rising inflation and a stock market correction—but markets show little sign of slowing down

The value of US M&A blew past the US$2 trillion mark in 2021, ending the year more than 30 percent above the previous record set in 2015. US deal value reached US$2.6 trillion, twice the value of 2020, and volume set a new record at 7,896 transactions.

Confidence reigned among dealmakers as stock markets continued to rise; increasing numbers of SPACs sought merger targets; and private equity houses set new records, deploying some of the sector's historic levels of dry powder. All of which was underwritten by flexible and cheap debt financing.

Technology was a major driver of M&A, fueled by pandemic-related trends that continued to accelerate deployment of digital technologies across all sectors. The tech sector itself led the sector charts. Companies with product mixes boosted by the pandemic, including those in the pharma and healthcare sector, turned to M&A to complement and add to their existing business portfolios.

Despite a continuing positive outlook, dealmakers will need to keep potential risks in mind in 2022. Under the Biden administration, CFIUS went on a recruitment drive, and it will clearly continue to take a more aggressive stance across sectors, particularly when deals involve technology.

Indeed, regulatory scrutiny is tightening from a number of angles. The Securities and Exchange Commission under chair Gary Gensler is taking a tougher stance on enforcement and has its sights set on SPACs, cryptocurrencies and ESG. And the Federal Trade Commission has announced far-reaching antitrust policy changes that may require companies that reach settlements to observe a ten-year mandatory clearance period on new acquisitions and disposals—the new rules would even apply to buyers of affected assets.

This increasingly tough approach to regulating M&A has so far had little impact on dealmakers' appetites for transactions—although new rules may eventually render some deals less attractive.

In response to recent inflation, the Fed will increase interest rates, which could pose another challenge for dealmakers. But given that rates are so low by historical standards, increases are unlikely to have any direct significant effect on M&A for most of 2022.

One of the biggest questions is whether stock markets will continue to hold up. A correction seems inevitable at some point, but it's unclear what might trigger one in the foreseeable future. For example, markets seem to have shrugged off concerns related to the emergence of the Omicron variant of COVID-19—at least at the time of writing. And private equity still has a mountain of capital to deploy. Recent events, however, suggest that markets will be volatile.

As a result, although regulatory hurdles continue to multiply, we expect 2022 will be another strong year for US M&A, with robust activity through the first half and possibly well beyond.


Surging M&A surpasses expectations

All the stars aligned in 2021, creating a confident and exceptionally busy M&A market

Record breaker: US M&A 2021

Record year for private equity dealmaking

Transaction values more than doubled year-on-year, as firms deployed ever-larger amounts of dry powder

Record breaker: US M&A 2021

What's next for SPACs?

Dynamics may be changing as the focus shifts to de-SPACs and regulatory scrutiny intensifies

Record breaker: US M&A 2021


Sector overview: Strong M&A activity pervades nearly every sector

In what was a stand-out year, M&A picked up the pace in almost every sector

Record breaker: US M&A 2021

Oil & gas M&A trends up due to recovery in demand and the pressing need for clean energy

Dealmaking may continue to rise, as price volatility abates and companies embrace energy transition

Record breaker: US M&A 2021

Technology M&A continues record run

The pervasiveness of technology, particularly since the pandemic, continues to drive deals to all-time highs

Record breaker: US M&A 2021

Pharma and healthcare deliver strong results

Despite the absence of megadeals, M&A in the sector climbed from 2020 levels thanks in part to strong PE and SPAC activity

Record breaker: US M&A 2021

Real estate deals come back to life

After dropping in 2020, real estate M&A ramped up significantly in 2021

Record breaker: US M&A 2021

In Focus

Antitrust: Extended timelines and broader scope

The Federal Trade Commission is taking an increasingly stringent approach to antitrust investigations

Record breaker: US M&A 2021

Cross-border deals face increased CFIUS scrutiny

Increased sector scope and concerns around a more aggressive approach to identifying non-notified transactions is leading to rising numbers of filings

Record breaker: US M&A 2021

SEC enforcement ramps up

Dealmakers should be braced for a more aggressive stance under Chair Gary Gensler

Record breaker: US M&A 2021

Financing likely to continue largely as is, despite inflationary worries

Borrower-friendly terms over the past few years have helped boost M&A totals—and a number of factors suggest the financing will not change dramatically in 2022

Record breaker: US M&A 2021

Good security practices for data and networks are essential to M&A success

With data privacy laws tightening and cyberattacks on the rise, due diligence of technology networks and data processes should be a top priority for dealmakers

Record breaker: US M&A 2021

Notable decisions from Delaware courts

In the second half of 2021, Delaware courts issued several decisions affecting M&A dealmaking

Record breaker: US M&A 2021

What's in store for 2022?

Five factors that will shape dealmaking over the coming 12 months

Record breaker: US M&A 2021
Record breaker: US M&A 2021

Pharma and healthcare deliver strong results

Despite the absence of megadeals, M&A in the sector climbed from 2020 levels thanks in part to strong PE and SPAC activity

2 min read

Healthcare and pharmaceutical deals continued at a robust pace through 2021, registering the third-highest value of any sector, behind technology and industrials, and with values and volumes both increasing year-on-year. In 2021, deal value rose to US$288.9 billion, a 38 percent increase on 2020; the number of deals rose to 976, a 25 percent rise year-on-year.

The kinds of blockbuster deals seen in 2018-2019, such as Takeda’s US$78.2 billion acquisition of Shire, were largely absent, as large corporates steered clear of a more aggressive antitrust environment under the Biden administration and continued to hone their portfolios to take advantage of what was undoubtedly a seller's market.

Cash to spend

Flush with dry powder and eyeing countercyclical opportunities, private equity continues to play a strong role in the market—the largest deal in the sector in 2021 was struck by a Carlyle-led consortium for Medline in a US$34 billion transaction.

Healthcare SPAC mergers have also remained in focus, as earlier stage, technology-focused businesses boosted by pandemic-related trends, such as telemedicine and data-driven diagnostic devices and discovery tools, begin to disrupt more traditional healthcare models. With the surge in SPAC IPOs over the past 18 months, these pre-revenue companies will attract further sponsor attention as technology convergence in the healthcare sector continues apace. We also expect these merger transactions to accelerate over the coming months, as sponsors and companies seek to get ahead of any potential change in regulation, given signals emanating from the SEC around SPACs.

Greater data, greater scrutiny

While incumbents will remain keen to ensure they stay up-to-speed with digitalization, big data and the application of machine learning and artificial intelligence across the healthcare and pharma spectrum, cross-border transactions in this space could face increased scrutiny. CFIUS in the US, the Data Security and Personal Information Protection Laws in China and similar legislation in some key European markets, such as Germany, are raising regulatory hurdles for dealmakers looking at digital healthcare M&A beyond domestic borders.

However, we expect there to be good M&A appetite among companies that have generated strong cash flows from product mixes that benefit from the pandemic. While these deals will likely retain a focus on core business lines, we see potential for these businesses to broaden and fill their portfolios. Pfizer’s announcement in late 2021 of its US$6.7 billion deal to acquire Arena Pharmaceuticals could be the shape of things to come, as the COVID-19 vaccine and antiviral pill manufacturer seeks to deploy cash from what it forecasts to be record revenues for the year.

Top healthcare deals 2021

  1. Medline was acquired by a consortium led by The Carlyle Group for US$34 billion 
  2. PPD was acquired by Thermo Fisher for US$21 billion 
  3. Soaring Eagle Acquisition Corp., a SPAC, merged with Ginkgo Bioworks for US$20 billion

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