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New heights: US M&A H1 2021

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US M&A set a new record for value in H1 2021—and nearly surpassed the full-year figure for 2020

A year of historic highs and rapid change

US M&A surged to record levels in the face of pandemic-related challenges and potentially dramatic regulatory shifts

We are just heading into August, but it is already safe to say that 2021 is a historic year for US M&A. Deal value rose to a new high of US$1.27 trillion in H1 2021. This was a 324 percent increase compared to H1 2020—and was virtually equivalent to the total value recorded in all of 2020.

This torrent of deals was the result of a perfect storm of activity on the part of strategic, PE and SPAC dealmakers. The pandemic drove many corporates to offload non-core divisions and acquire digital capabilities. Corporates that thrived during the pandemic used M&A to consolidate gains. PE firms strove to deploy their massive troves of dry powder. And SPACs searched for opportunities to invest the record levels of funds they raised.

The election of Joe Biden as President significantly reduced political uncertainty that may have dampened activity in 2020 and this spurred dealmaking in 2021. However, the administration's policies could also complicate dealmaking.

The Biden Administration is taking vigorous steps to reshape antitrust policies and practices in the US. In July, the President issued an Executive Order to promote competition and lower prices throughout the economy through increased antitrust enforcement. These efforts are likely to intensify during the run-up to the US midterm elections in November 2022. The effects were already visible in the recent decision by Aon and Willis Towers Watson to call off their merger, which they first announced in March 2020. The deal would have created the world's largest insurance broker, but the Department of Justice opposed the deal on the grounds that it would eliminate competition, reduce innovation and lead to higher prices.

CFIUS has shown that it will mostly continue with the more aggressive approach to evaluating deals for national security concerns that was established by the previous administration. And with the appointment of Gary Gensler as Chair of the Securities and Exchange Commission, the administration signaled it will take a more aggressive approach to securities law enforcement.

There are a number of other looming risks as well. The possibility of rising inflation and the end of government support measures related to the pandemic could shock the market. And dealmakers are concerned about potentially frothy valuations.

But perhaps the greatest variable remains the uncertain trajectory of the pandemic. Though the US was on a course of increasing optimism as vaccines were rolled out, recent concerns about the Delta variant of COVID-19 have raised questions—and exacerbated political divisions—about how quickly economies should open up.

Despite these challenges, the outlook for dealmaking remains very positive. US GDP forecasts are upbeat, stock markets are at historic highs, and interests remain low. Moreover, the Biden Administration's economic stimulus efforts and ambitious plans for energy transition and infrastructure development will inject large sums of capital into the economy. We expect US M&A to remain very active in the second half of 2021.


US M&A hits record highs

The US enjoyed record levels of M&A activity in H1 2021, as dealmakers made up for lost time caused by pandemic-related disruptions

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Private equity deal activity forges ahead

US private equity has rallied following pandemic lockdowns, thanks to adaptations to remote deal processes and record dry powder

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Sector overview: TMT and healthcare continue to dominate

TMT M&A tops the sector charts again

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Oil & gas M&A rebounds after pandemic lows

After a year of volatility, the oil & gas industry has stabilized and M&A activity has resumed


Technology dealmaking goes from strength to strength

Technology M&A activity is thriving in 2021 as dealmakers continue to turn to the sector in search of assets with high-quality earnings and growth prospects

electronic engineering

Healthcare displays strong deal activity post-pandemic

The value of healthcare M&A in H1 surpassed pre-pandemic levels


Consumer and retail M&A picks up speed

Deals in the consumer and retail sector show signs of recovery as consumer spending
rallies post-pandemic

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Power & renewables M&A soars on back of green policies

The power and renewables industry is positioned for a sustained period of strong deal
activity as the US focuses on hitting net zero carbon emissions by 2050

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Real estate sees welcome revival in M&A in 2021

M&A value among real estate firms quadrupled year-on-year in H1, after a tough 2020

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Infrastructure M&A forges ahead, even before government boost

After a pause, investment in infrastructure has ballooned, even before the Biden administration's US$1 trillion-plus plan is passed


In focus

US dealmaking braces for more challenging antitrust environment

After campaigning for the presidency on a platform that included more aggressive antitrust enforcement, Joe Biden has taken early steps to honor those pledges

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CFIUS set to continue careful scrutiny under Biden Administration

President Joe Biden's approach to the national security risks posed by foreignbacked M&A may differ in style from his predecessor, but not in substance


Reverse break-up fees emerge in response to deal terminations

Even as economies pick up, dealmakers have maintained focus on managing the risk of broken deals

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SEC to take tougher line on enforcement

New Securities and Exchange Commission Chair Gary Gensler has put scrutiny of
SPACs and private funds at the top of his agenda


Notable decisions from Delaware courts

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

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Six trends to look out for in the second half of 2021

After a turbulent 18 months which saw M&A crash before an impressive return to form, H2 2021 is set for continued strong deal activity, as well as new challenges

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Real estate sees welcome revival in M&A in 2021

M&A value among real estate firms quadrupled year-on-year in H1, after a tough 2020

2 min read

US$44.2 billion

The value of 18 transactions in the US real estate sector in H1 2021

Real estate was particularly hard hit by lockdowns, with many real estate operators carrying significant holdings of hotels, shopping malls and office space in their portfolios. With nonessential shops forced to shutter and employees instructed to work from home, many portfolios were in distress. McKinsey estimated that real estate asset values fell by an average of 25 percent immediately following lockdowns, while a number of US property funds had to limit distributions and redemptions to survive pandemic uncertainty.

But the sector has shown positive signs of recovery as the economy has stabilized, vaccines have been rolled out and shops, restaurants and hotels have been able to reopen. The Dow Jones US Real Estate Index, which lost more than 40 percent of its value within a month in Q1 2020, is back in the black and showing gains of more than 20 percent for the year to date.

As real estate stocks have recovered, confidence has returned for real estate M&A dealmakers. Real estate deal value climbed almost fourfold year-on-year, coming in at US$44.2 billion from 18 deals (up from 16 transactions in H1 2020).

A variety of drivers have supported the deal uptick. A year on from the first lockdowns, real estate dealmakers have been able to identify the most resilient real estate sub-sectors and quantify the impact on the sub-sectors most impacted by the pandemic.

The largest deal of the sector is something of a turnaround story. Realty Income Corporation and VEREIT, both of which own portfolios of commercial real estate, each saw their share price crash in spring 2020 as a result of lockdown measures. Share prices have since recovered, allowing the two parties to proceed with the US$17 billion merger.


Percentage increase in deal value compared to H1 2020


Pivot to delivery and data

Assets in industrial real estate and data centers have performed strongly, a consequence of the mass shift to online shopping and remote working.

According to real estate investor and advisory firm CBRE, developers increased warehouse capacity by 9.5 percent in 2020 to address rising demand. Asking rents for warehouses are up 8.3 percent year-on-year. The US data center market, meanwhile, is expected to expand by 13.8 percent in 2021.

A clear example is the second largest real estate deal of H1, which saw Blackstone buy QTS Realty Trust, an operator of multi-tenant data centers, for US$8 billion.

Top real estate deals H1 2021

  1. VEREIT is acquired by Realty Income Corporation for US$17 billion
  2. Blackstone Group bought QTS Realty Trust for US$8 billion
  3. Blackstone Real Estate Income Trust acquired Home Partners of America for US$6 billion



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