Over 75% of surveyed clients executed deals in 2021.
In November, we surveyed global investment banking clients to evaluate key transaction drivers and what to expect in 2022
Those surveyed represent:
Deal value at announcement (in Trillion / USD)
By the numbers: global M&A volumes over the last 20+ years
Global M&A volumes surged to $5.9 trillion in 2021, eclipsing the previous record set in 2007 and marking the largest M&A year in history. Transactions small, large and “mega” drove innovation and transformation across industries through the acquisition of new capabilities, the adoption of ESG initiatives and the integration of technology into every part of the economy.
M&A’s New Normal
Both corporates and financial sponsors continue to look for innovative ways to deploy capital and opportunities to pursue transformational growth, fueling significant activity.
3 primary drivers of M&A strategy…
Over 80% consider scale-up acquisitions a part of their strategic model for growth acceleration.
Clients continue to look for differentiating opportunities to win mind share with their customers: 63% turned to acquisition of new tech/tech capabilities to do so.
Relative competitive positioning
~75% signify drive for efficiency continues to be an important factor in M&A decisions – and markets have continued to “give credit” for announced synergies.
in tech M&A, the highest-ever full-year volumes.
…account for robust activity across industries...
Tech, Media & Telecom
2021 YoY increase in industry volume
2021 vs prior 5-year average
(Sorted by volume)
Specifically influencing existing operations and reshaping portfoilios.
…as ESG catapults to the forefront
indicated ESG initiatives played an influential role in their 2021 M&A strategy.
Even with strong corporate balance sheets and high levels of uncommitted capital, market participants need to explore new ways to create meaningful value for shareholders and investors.
Despite record M&A levels, deal sourcing remains a consistent challenge
Challenges underscored by
Measuring the challenges for deal sourcing in 2021
Competition for attractive assets
Ongoing COVID-19 concerns
Challenges can be overcome through creativity and innovation – in 2021, companies recast their assets into different geographic regions using spinoffs and spin-mergers, which became instrumental alternatives in the sell-side M&A playbook.
Clients remain optimistic as they define 2022 M&A strategy.
We’re expecting another busy year underscored by:
As COVID-19 concerns linger, 80% of surveyed clients continue to find virtual meetings an effective alternative to in-person meetings.
Companies continue to hold record levels of cash on their balance sheets, of which an increasing proportion is being used for M&A.
Strong corporate balance sheets
Uninvested financial sponsor global dry powder has increased nearly 60% in just five years and continues to climb.
Mounting dry powder
55% are somewhat or extremely likely to engage in cross-border M&A in 2022.
Consideration for cross-border M&A
40% say recent or anticipated regulatory developments have not directly impacted M&A outlook.
Subsiding regulatory concerns
Likeliness to pursue M&A in 2022
And momentum keeps increasing