Global mergers and acquisitions (M&A) activity broke all-time highs in 2021, far surpassing the previous mark of nearly 15 years ago.
The value of mergers and acquisitions globally surpassed US$ 5 trillion in 2021 for the first time (R$ 28.5 trillion at the current price). Volumes grew 63 percent to $5.63 trillion as of Dec. 16, according to data from Dealogic. The result is greater than the old record of US$4.42 trillion (R$25.21 trillion), established in 2007, the pre-financial crisis year.
“Corporate balance sheets are incredibly healthy, with $2 trillion ($11.4 trillion) in cash in the US alone, and access to capital remains widely available at historically low costs,” said Chris Roop, who is part head of JPMorgan’s mergers and acquisitions department.
Technology and healthcare companies, which typically represent the largest share of the M&A market, pulled the line again in 2021, driven in part by pent-up demand last year, when the pace of mergers and acquisitions dropped to a three-year low due to the global financial consequences of the Covid-19 pandemic.
Total US business volume nearly doubled in 2021 to $2.61 trillion ($14.9 trillion), according to Dealogic. In Europe, transactions jumped 47%, to US$1.26 trillion (R$7.2 trillion), while in the Asia-Pacific region there was an increase of 37%, to US$1.27 trillion (R$7.2 trillion). trillion).
“Although China’s international activity has been modest, companies from other Asian countries have intensified their purchases of global assets. We hope to see this trend continue, especially for businesses in Europe and the US,” said Raghav Maliah, global vice president of global assets. Goldman Sachs investment bank.
The availability of financing boosted the private equity business, with volumes more than doubling from last year, to a record $985.2 billion (£5.6 trillion), according to Dealogic.
ABUNDANT FEES
After a year of restrictions by Covid-19, leading Wall Street investment banks encouraged their professionals to meet more clients in person in their pursuit of more lucrative mandates.
“This year, we are expected to exceed $100 billion (£570.5 billion) in fees with the investment bank’s global operation,” said Berthold Fuerst, co-head of global mergers and acquisitions at Deutsche Bank
Borrowing costs are expected to rise in the coming months as the US Federal Reserve has indicated it will raise rates next year to combat escalating inflation. However, bankers expect M&A activity to remain robust.
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