2021’s M&A market ends at all-time high with over $5 trillion in deals

03 January 2022 Consultancy.uk 2 min. read
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2021 has gone down as the best year on record for the global merger & acquisitions market, according to an end-of year round-up by Bain & Company, a strategic advisor the M&A scene.

Across all deal types, 2021 was a bumper year, with deal value jumping from $3.7 trillion in 2020 to $5.3 trillion in 2021 – the highest total deal value since Bain & Company has been keeping track of the market back in 2000.

Total M&A value for 2021

Continuing a trend seen in recent years, financial investors have continued their growing share of the landscape, closing around $1 trillion in deals. This segment includes transactions by private equity firms (which focus on mid- and large-sized deals in established companies) and venture capitalists (which focus on investments in start-ups and scale-ups).

Further reading: Private equity industry on pace for best year in history.

Total strategic M&A value for 2021

Strategic M&A – mainly deals by multinationals and corporates – ended the year at $3.7 trillion, making 2021 the second best year on record following 2015. However, the market was lifted by large-cap deals and a number of megadeals, with volume continuing to decline as seen over the past several years.

M&A by corporates has recovered across all regions and industries, with North America remaining the globe’s largest market for acquisitions, divestments, carve-out and other deals.

Total corporate M&A value by region and industry

A rebounding economy and heating M&A market has seen strategic M&A multiples reach an all-time high, with a median multiple of 16x EV/EBITDA. With targets in almost all industries seeing valuations significantly up in 2021, corporates are paying more than ever for their targets, as they seek to navigate a rapidly changing and in many cases disruptive landscape.

Deal valuations

An optimistic outlook for 2022

Looking ahead, Bain & Company’s experts are optimistic that the fundamentals of dealmaking will continue to attract buyers in the year ahead, and most buyers expect deal activity to stay the same or increase in the coming year.

However, “M&A executives should continue to monitor the impacts of a tightening fiscal policy and regulatory landscape, macroeconomic factors such as supply chain disruptions, and competition from financial investors with access to significant dry powder,” concluded the report.