M&A is Rebounding Dramatically in September, With Q3 Deal Value Up 80 Percent From Previous Quarter

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Worldwide M&A total deal value is up 80 percent in the third quarter, compared with the second quarter, according to Refinitiv. The quarter delivered 10,893 transactions, valued at just over $1 trillion, making it the strongest quarter-to-date for global dealmaking since the second quarter of 2019. (Note: Data is through the Sept. 28.)

“In the face of the global Covid-19 pandemic and economic lockdown, for just the eleventh time over the past 40 years, quarterly merger activity has surpassed $1 trillion during the third quarter of 2020,” says, Matt Toole, director of deals intelligence, Refinitiv. “Whether it’s delayed merger announcements held over from this past Spring, the arrival of opportunistic strategic buyers or private equity buyers flush with cash and friendly credit markets or the desire to strike deals before the results of the upcoming U.S. presidential election, there’s no question that dealmaking strongly rebounded far earlier than expectations. The pace of deals, coupled with record levels of equity and debt capital raising, the resurgence of SPAC IPOs and the re-emergence of direct listings, illustrates that investment bankers have likely never been more in demand. Corporations around the world are evaluating their post-pandemic game plans, and it’s fair to say that M&A and capital raising will play a pivotal role in how those game plans become reality.”

Dealmaking activity in September was strong. The value of global M&A announced during September 2020 is $390.7 billion, 73 percent more than the previous September and the highest September total since Refinitv’s records began in the 1970s.

September 2020 recorded the highest monthly global merger total in 15 months. Mega deals boosted September M&A figures in Europe to the highest monthly total since March 2008. September ends the run of four consecutive months of M&A growth in the Americas. While July saw the value of Asia-Pacific M&A rocket to its highest level since December 2015, merger activity halved in August and declined a further 18 percent in September.

Not surprisingly, given the global pandemic, M&A activity in the first three quarters still trails the previous year significantly. Worldwide M&A activity totals $2.2 trillion during year-to-date 2020, down 21 percent compared with the same period last year. The year-to-date tally marks the lowest YTD period for deal making since 2013, when it was $1.7 trillion.

By number of deals, worldwide dealmaking has fallen 11 percent so far in 2020, a six-year low. Global M&A for deals greater than $10 billion has decreased 37 percent compared to the same period last year, while deals between $5-$10 billion have increased 24 percent, by value, and increased 24 percent, by number of deals, compared with a year ago.