M&A: Tech leads crisis-driven boom with $350 billion deal rush

Wall Street

Global M&A volumes are exceeding $2 trillion for 2020, with technology making up almost a fifth of the total after mammoth deals such as SoftBank’s $40 billion purchase of chip designer Arm.

Deal making has stepped up a gear over the past few weeks, with Nvidia Corp just yesterday announcing the acquisition of Britain’s Arm from Japan’s SoftBank.

Others are arriving thick and fast, with Verizon purchasing Mexican cellular phones provider Tracfone for about $ 6.25 billion and Gilead Sciences to acquire biotechnology business Immunomedics for around $21 billion.

Such waves are feature following downturns, but Refinitiv data demonstrates 2020’s $1.97 trillion total of deals announced so far exceeds $1.26 trillion and $1.6 trillion during the same period in 2009 and 2010 respectively, following the 2008 fiscal crisis.

Tech businesses included 17.8% of the total at $351.4 billion, the highest level since the dotcom boom of 2000, while financial services were in second place with a deal value of $283.8 billion or 14% of their total, Refinitiv explained.

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Tech’s dominance, the information revealed 5,966 deals targeting technician so far this year out of a total of just over 30,000, reflects the broader impact the COVID-19 catastrophe has had.

PLATFORMS LEADING THE WAY

The en masse change by people stuck at home to internet-powered platforms for shopping, working, schooling, medical consultations and communicating has ignited speculation that some of these shifts are permanent.

“Because of the changes that will come on back of this, companies will be thinking of whether they have the right business structures. There is a greater risk of a structural change in consumer behaviour than after previous recessions,” Secker at Morgan Stanley explained.

The team at Platform Executive hope you have enjoyed this news article. Initial reporting via our official content partners at Thomson Reuters. Reporting by Sujata Rao. Additional reporting by Rachel Armstrong. Editing by Alexander Smith.

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