Home » Race for tech mergers amid digitization spree brings global M&A value over $1trn

Race for tech mergers amid digitization spree brings global M&A value over $1trn

by LLT FINANCE REPORTER
3rd Aug 21 10:35 am

The rising use of technology due to social distancing and lockdowns has led all sectors to enter a digitization rush, according to GlobalData, with companies using mergers and acquisitions (M&A) as a key strategy.

The leading data and analyics company notes that there has been a huge rise in M&A value, demonstrated by examples such as the medical device industry, which saw a 913% increase in Q2 year-on-year (YoY), and the foodservice industry, which saw a 586% rise. This push from companies to get their hands on the latest tech has led the global M&A value to rise to $1 trillion in Q2, 2021.

The company’s latest report, Global M&A Deals in Q2 2021 – Top Themes by Sector – Thematic Research’, notes that a total 8,712 M&A deals were announced in Q2 2021, 2,876 of which involved tech, media and telecom companies.

Snigdha Parida, analyst for Thematic Research at GlobalData said, “Companies across all sectors are focusing on obtaining the key technologies they need to help them to adjust to the realities of life in the COVID-19 pandemic. Companies have been most interested in digital media and cloud, which isn’t a surprise as GlobalData expects these technologies to cause waves in industry in the coming years. In fact, the biggest deal of the quarter was the merger of AT&T’s WarnerMedia’s entertainment, sports and news assets with Discovery for $43bn, which reflects the importance of the digital media theme.”

The medical devices industry saw the greatest growth in M&A value, with a 913% increase in deal value in Q2 2021 year-on year, followed by foodservice with 586% growth and pharma with 458% growth. In terms of deal volume, the healthcare sector saw the highest increase of 70% from Q2 2020.

Parida added, “Adopting technology by healthcare related sectors has been a key feature of the market in 2021 to date. The digitalization of healthcare systems including telehealth, virtual care, smart health devices, as well as healthcare practice management software, has helped companies’ to revamp their existing business models.”

Q2 2020 saw the lowest quarterly M&A transaction value in last five years, with a total of of $364bn. Activity rebounded sharply in Q2 2021, with $1 trillion in terms of total transaction value.

Parida continued, “2020 was a landmark year for M&A activity, with a rapid recovery in activity in the second half of the year and this as continued into 2021 to date.”

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