Global M&A activities spiked after a period of “standing still” because of COVID-19
After a period of “immobilization” because of the COVID-19 pandemic, companies are coming back and conducting mergers and acquisitions (M&A) deals.
Observers say that after a period of “standoff” because of the COVID-19 pandemic, companies are coming back and making mergers and acquisitions (M&A) when they have a look. be clearer about the impact of the pandemic on its business.
According to the latest report by Refinitiv data collection and analysis firm, M&A activity has “exploded” in the third quarter of 2020 when senior management has regained confidence and reviewed the suspended transactions. stagnant during the peak of the pandemic.
The “fever” in September has brought the total value of global M&A deals to more than 1,000 billion USD in the last quarter and increased by more than 80% compared to the second quarter, mainly focusing on areas with “resilience” through pandemics such as technology and health care.
In the third quarter, the trading volume in the US tripled to $ 414 billion compared to the second quarter, while in Europe, it increased by 21% to $ 231 billion and the Asia-Pacific region increased by 67% to $ 274 billion. .
Refinitiv said that the “fever” M&A in the third quarter created the biggest motivation for mid-sized mergers. Transactions between $ 5 and $ 10 billion have increased 24% year-to-date, while deals worth more than $ 10 billion have fallen 37% over the same period.
The report mentioned that the latest victim of the pandemic was a $ 16 billion M&A between the “giant” of the French luxury goods industry LVMH and the American jewelry company Tiffany. The future of the deal is blurred as LVMH says it cannot meet the deadline of the deal.
Although it was a significant loss to the transatlantic M&A, the “flow” of M&A between the US and Europe was partially offset by Nvidia’s $ 40 billion acquisition of the design company. chip Arm Holdings of the UK.
Other major deals in the world include China National Petroleum Corporation (PetroChina) reselling oil and gas pipelines for $ 49 billion, or the decision to spend $ 42 billion to bring telecommunications corporations. Multinational Altice is wholly privately owned by its founder Patrick Drahi.
However, the surge in the third quarter did not compensate for the delay following this year’s weak start. Generally, from January to September 2020, the total value of global M&A deals has decreased by 21% compared to the same period last year to $ 2,200 billion. In particular, transactions in the US totaled 800 billion USD, down 43% in the same period.
Business people said that the US presidential election taking place on November 3 is the factor that makes companies consider their M&A activities. But sustained economic recovery will help spur that up even further, regardless of the COVID-19 winners.