Cross-Border Bulletin: Jan 2021 – Trends and Drivers Impacting Global M&A
Global cross-border M&A volumes whipsawed in 2020. In the first half of the year, the onset of the coronavirus pandemic caused uncertainty, leading to a dramatic decline in volumes (1H 2020 bottomed out at levels not seen since 2009). In contrast, 2H 2020 cross-border M&A snapped back, with the year ending at $749B in volume, down only 5.6% compared to 2019. CEOs, emboldened from surviving the initial months of the pandemic, leveraged a favorable deal making environment to pursue attractive M&A opportunities. Unprecedented monetary support from global banks kept interest rates low, providing inexpensive and free-flowing financing to acquirors. We also saw the return of the “Mega Deal”, including S&P Global’s $43B acquisition of IHS Markit and NVIDIA’s $40B acquisition of ARM.
We expect 2021 to continue enjoying the momentum of an active deal environment. As we discuss in this issue, there are several positive trends creating tailwinds into the new year. SPACs, which have become a U.S. phenomenon with more than $80B in proceeds raised in 2020, will continue to drive deal activity globally. European corporates, which acquired U.S. targets at an increased rate during 2H 2020, will continue to pursue M&A as they look abroad for expansion and continue to undergo consolidation in their home countries.
Particular themes discussed in this issue include:
- Will the U.S. SPAC Boom Go Global?
- Consolidation Coming for European Banks?
- Amidst the Pandemic, Europe Turns West
- Country Focus: China
- Sector Focus: Online Gaming