M&A Rebound Going Strong

Worldwide M&A total deal value was up 98 percent in the third quarter, compared with the second quarter, according to Refinitiv. The quarter delivered 12,307 transactions, valued at just over $1.1 trillion, making it the strongest quarter-to-date for global dealmaking since the second quarter of 2018.

“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 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 $483.6 billion, 114 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 four years (since October 2016). Mega deals boosted September M&A figures in Europe to the highest monthly total since March 2008. September marked the fifth consecutive month 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 has averaged $81 billion for the previous two months.

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 $2.342 trillion during year-to-date 2020, down 18 percent compared with the same period last year. The year-to-date tally marks the lowest YTD period for deal making since 2016, when it was $2.339 trillion.

By number of deals, worldwide dealmaking has fallen 8 percent so far in 2020, a five-year low. Global M&A for deals greater than $10 billion has decreased 33 percent compared to the same period last year, while deals between $5-$10 billion have increased 23 percent, by value, and increased 24 percent, by number of deals, compared with a year ago.

Editor’s Note: This is an updated version of a story that we published on Sept. 30.