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M&A Update

As the company is eager to take advantage of cheap financing and huge profits, the crazy summer of transactions is expected to break records in 2021. Since the beginning of the year, nearly 4 trillion US dollars of transactions have been reached.

In August, which is usually quiet, global transaction volume was US$500 billion, higher than the US$289 billion in the same month last year and US$275 billion in 2019. The vaults of private equity groups, and animal spirits return to the company’s board of directors.

According to data compiled by Refinitiv, the summer boom helped drive global mergers and acquisitions to a record US$3.9 trillion, more than double the amount in the same period last year and higher than the US$2.6 trillion in 2019.

At this rate, the total amount of M&A activity this year will exceed the highest level in history before the outbreak of the financial crisis in 2007, when the value of transactions announced at that time was US$4.3 trillion.

Frank Aquila, Global Head of M&A at Sullivan & Cromwell Law Firm, said: “Since most companies have created record profits, can obtain cheap debt and experience high stock prices, in the next 6 to 12 During the month, it is difficult for M&A activities to slow down.”.

Of the nearly 40,000 deals announced since January, many of them are huge-reaching tens of billions of dollars-including a record number of cross-border cooperation, such as General Electric’s decision to sell its aircraft leasing division to an Irish competitor AerCap’s over 30 billion U.S. dollars and the struggle between Canada’s largest railroad group to acquire the southern part of Kansas City for over 31 billion U.S. dollars.

The trading boom has boosted Wall Street’s revenue. In the most recent quarter, JPMorgan According to the report, global investment banking fees reached a record US$3.6 billion, while Goldman Sachs fees It has risen by more than one-third.

Large international law firms are also booming, many companies report record profits, and partners enjoy generous salaries.

This year’s transaction boom has triggered a battle for talent on both sides of the Atlantic, pushing up the salaries of junior lawyers and bankers.

M&A activity is also extensive, as most industrial sector deals have achieved double-digit or triple-digit percentage growth compared to last year.

The technology industry leads the way, accounting for 21% of all M&A activities, up from 16% last year, which is the highest percentage since the technological boom in 2000.

So far this year, technology companies have concluded 8742 transactions valued at US$832 billion, up from US$301 billion in the same period last year and US$291 billion in 2019.

Global M&A by industry

Some of the biggest technology deals include Dell’s $52 billion spin-off From VMware, Grab’s $40 billion merger With a special purpose acquisition company and Microsoft decided Buy speech recognition Nuance, a $16 billion pioneer.

Atif Azher, corporate partner of Simpson Thacher & Bartlett, said: “The high valuations of listed technology companies provide them with real money to undertake certain acquisitions-their stock is very attractive to potential target companies.”

He added: “Companies are also increasingly focusing on using technology to help improve efficiency and connectivity, and the pandemic has accelerated this process.”

Financial services and real estate transactions have also experienced a boom, with a series of large acquisitions, including Square’s $29 billion all-stock acquisition Of Australia’s “Buy Now Pay Later” providers Afterpay and Vici Properties’ $17.2 billion in transactions Growth properties with MGM.

Krishna Veeraraghavan, M&A partner at law firm Paul Weiss, said: “In the real estate industry, the real estate market downturn in 2020 due to the pandemic now presents opportunities for integration and investment, especially in the context of low interest rates.”

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