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Dealmakers in almost every industry had an outstandingly busy 2021. With just a few exceptions, the M&A boom swept across the US economy with deal values, in particular, up significantly on 2020 totals.
Nevertheless, technology clearly dominated with records set for value and volume. There were 2,193 technology deals in 2021, a 69 percent increase on 2020 numbers, while value rose 133 percent to reach US$790 billion.
The second-largest sector by value and by volume was industrials and chemicals, which saw US$299 billion worth of deals in 2021, a massive increase of 111 percent over the previous year. Deal numbers rose by 31 percent to 1,127. This is a significant rebound for an industry that was heavily affected by the stay-at-home orders in 2020, when manufacturing plants had to shut down for a time. Increased M&A here may reflect a desire by companies to bring at least part of their supply chain closer in light of pandemic-related disruptions, which have continued throughout 2021.
Pharma, medical and biotechnology came in third by value, up 38 percent on 2020 to reach US$289 billion, while volume was up to 976 deals, a rise of 25 percent.
Perhaps understandably, given changing consumer behaviors and increased consumption of home-based entertainment through the pandemic, the biggest increase in total deal value for 2021 was in the media sector—aggregate value rose by a staggering 744 percent to US$182.9 billion. The sector was responsible for the largest deal of 2021—AT&T’s US$96 billion spin-off of WarnerMedia, and merger with Discovery. It also had another top-ten deal with Vivendi’s US$32.5 billion acquisition of Universal Music Group. Financial services and real estate also saw significant increases in deal values in 2021.
There were, however, a few sectors that recorded lower transaction value in 2021 compared with the previous year. Retail fell from US$35 billion to US$33.6 billion, reflecting the challenging environment that brick-and-mortar stores face as shoppers migrate online. Telecoms fell marginally, as did energy, mining and utilities, and defense M&A values.
As we move through 2022, however, we may well see some of these sectors pick up the pace on M&A. Retailers are likely to need to consolidate further and there may be scope for some turnaround or distressed deals. Energy, mining and utilities deals could be set for further M&A activity—many of the materials needed for technological devices, for example, come from the ground, while energy transition could boost dealmaking significantly.
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