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For US M&A, 2021 is a Year of Historic Highs and Rapid Change

According to a New Report by White & Case

US deal value rose to a record 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, according to a new report, New heights: H1 2021, by global law firm White & Case LLP.

"This torrent of deals was the result of a perfect storm of activity on the part of strategic, PE and SPAC dealmakers," said John Reiss, Global Head of M&A at White & Case. "However, the Biden administration could complicate dealmaking by pursuing aggressive policies in areas such as antitrust, CFIUS review, and securities law."

The report analyzes trends that drove the surge and that will shape the future of dealmaking. That includes analysis in areas that could complicate M&A over the next year, such as:

  • Antitrust: The Biden administration is taking vigorous steps to reshape antitrust policies and practices in the US. This was strongly signaled in a recent Executive Order on promoting competition through increased antitrust enforcement
  • National security: The Committee on Foreign Investing in the United States (CFIUS) is set to continue its policy of careful scrutiny under the Biden administration
  • Securities law enforcement: The Securities and Exchange Commission (SEC) has signaled that it will take a more aggressive approach to securities law enforcement

Despite these challenges, the outlook for dealmaking remains very positive. US GDP forecasts are upbeat, stock markets are at historic highs, interest rates remain low and the Biden administration has plans to inject large amounts of capital into the economy. These factors are having an effect across sectors.

"Throughout the first half of the year, dealmakers continued to pursue high-quality, resilient assets in stable sectors such as tech and healthcare. But there was also a growing appetite for deals in sectors that were hardest hit by COVID lockdowns, such as consumer, leisure and oil & gas," noted Reiss.

US sector highlights include:

  • Tech: The value of US tech M&A rose 387 percent year-on-year to US$324.1 billion on increasing deal volume. The TMT sector, which includes tech, media and telecom, topped the sector charts at US$473.2 billion
  • US oil & gas: Year-on-year, oil & gas M&A value increased more than eightfold to US$45 billion in H1 2021. Volume rose by 73 percent to 71 deals
  • Healthcare: Investors continued to pursue deal opportunities in this sector that has played such a crucial role in managing the pandemic. Total healthcare deal value reached US$174 billion in the first half of the year, a 319 percent increase on H1 2020

For the first half of 2021, White & Case ranked #1 by value for Global M&A, according to Mergermarket and Reuters, and #1 by value in the Americas, according to Mergermarket for the same period.