2021 had been a historic year for merger and acquisition (M&A) activity that was fuelled largely by the easy availability of cheap financing and booming stock markets. Global M&A volumes topped $5 trillion for the first time ever, comfortably eclipsing the previous record of $4.55 trillion set in 2007, Dealogic data showed.
According to Refinitiv, the overall value of M&A stood at $5.8 trillion in 2021, up 64 percent from a year earlier, thus setting the stage ready for global dealmaking to maintain its scorching pace this year.
Flush with cash and encouraged by soaring stock market valuations, large buyout funds, corporates and financiers struck 62,193 deals in 2021. This was up 24 percent from the year-earlier period, as all-time records tumbled during each month of the year.
Investment bankers said they are expecting the dealmaking frenzy to continue well into 2022, despite looming interest rate hikes. Higher interest rates increase borrowing costs, which may slow down M&A activity. However, deal advisers still expect a flurry of large mergers in 2022.
The United States led the way for M&A, accounting for nearly half of global volumes. The value of M&A nearly doubled to $2.5 trillion in 2021, despite a tougher antitrust environment under the Biden administration.
The largest deals of the year included AT&T Inc's $43 billion deal to merge its media businesses with Discovery Inc; the $34 billion leveraged buyouts of Medline Industries Inc; Canadian Pacific Railway's $31 billion takeovers of Kansas City Southern; and the breakups of American corporate behemoths General Electric Co and Johnson & Johnson.
Deals in sectors such as technology, financials, industrials, and energy and power accounted for the bulk of M&A volumes. Buyouts backed by private-equity firms more than doubled this year to cross the $1 trillion mark for the first time ever, according to Refinitiv data.
