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Global M&A Soars by 88 Percent to $2.4 Trillion in H2 2020; History's Strongest H2

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Global M&A Soars by 88 Percent to $2.4 Trillion in H2 2020; History's Strongest H2

2020 saw a huge surge in global merger and acquisitions (M&A). The global M&A deal value amounted to $3.6 trillion in 2020, which is five percent less compared to similar period in 2019. Despite the pandemic taking a toll on the global economy and the first half witnessing one of the worst seasons, the second half of 2020 turned out to be the glorious second half in the history ever.

According to the research data analyzed and published by Sijoiturahastot, the global M&A deal value amounted to $1.2 trillion during the first half of the year. It was 41 percent lower compared to the previous year same period, and was the slowest first half since H1 2013.

When compared to Q1 2020, the M&A activity in Q2 2020 was nearly 25 percent less, which itself was the slowest quarter of deal making since Q1 2012.

However, when it comes to total number of deals sealed, H1 2020 saw a 16 percent decline, marking a six-year low. However, a strong H2 2020 helped the year from becoming the worst. The second half of 2020 saw two consecutive quarters of deal value surpassing $1 trillion. In total, the value of the M&A deal activity in H2 2020 totaled $2.4 trillion.

H2 2020 saw nearly 88 percent uptick, marking the strongest consecutive half-year increase in history. The previous record was set in the second half of 1997 when there was a 46 percent increase.

The total M&A deal activity deal worth $3.6 trillion in 2020, which was a three-year low; the previous low was in 2017 ($3.2 trillion).

However, the number of deals in 2020 saw a four percent decline, marking a four-year low. But the most surprising fact is that the number of deals worth $10 billion and above decreased by 21 percent. On the other hand, the number of deals valued between $5 billion and $10 billion increased by 38 percent YoY, ad their value shot up by 36 percent YoY.

The H2 2020 saw a total of 78 mega deals (valued at $5 billion or higher). For the YTD period, the number of mega deals reached 116, up from 97 in 2019. October itself saw 20 mega deals, the highest in 2020 and second highest in history.

However, the US deal value declined by 21 percent YoY ($1.4 trillion) while Europe’s shoots up by 34 percent ($988.6 billion).

APAC saw a 15 percent increase, with deal value amounting to $871.5 billion up from nearly $758 billion in the previous year, the strongest YTD performance for deal making in the region since 2018.

Technology was the leading sector in 2020, posting a 49 percent uptick to reach $679.2 billion. The sector accounted for a remarkable 19 percent of total M&A activity YTD.

It was followed by financials with a total deal value at $489.6 billion, a six percent decline YoY. The next in line was energy & power sector which accounted for 12 percent of deal activity despite 13 percent YoY decline.

EY expects that this stronger than expected H2 rebound in global deal making is set to continue into 2021.

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