The global activity of mergers and acquisitions (M&A) broke historic record in 2021, easily surpassing the previous mark of almost 15 years ago.
The value of mergers and acquisitions globally surpassed US$ 5 trillion in 2021 for the first time. 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, established in 2007, the pre-financial crisis year.
“Corporate balance sheets are incredibly healthy, with $2 trillion in cash in the US alone – and access to capital remains widely available at historically low costs,” said Chris Roop, who co-heads the mergers and acquisitions portion of the JPMorgan.
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.
The total turnover in the USA it nearly doubled in 2021 to $2.61 trillion, according to Dealogic. At Europe, transactions jumped 47%, to $1.26 trillion, while in the Asia-Pacific region there was an increase of 37%, to $1.27 trillion.
“Although the international activity of China has been modest, companies from other Asian countries intensified the purchase 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 investment banking at the Goldman Sachs.
The availability of financing boosted the private equity business, with volumes more than doubling from last year, to a record $985.2 billion, 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 should exceed $100 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.
Source From: Moneytimes
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