Global technology, media and telecommunication (TMT) merger and acquisition (M&A) deals hit a value of US$323.1 during the first quarter of 2021, making it the strongest sector for deal value.
This is according to Snigdha Parida, analyst for thematic research at analyst firm GlobalData, who claimed that the TMT sector accounted for not only the highest level of M&A deal value out of all sectors, but for deal volume as well.
Overall, 8,823 M&A deals were announced during Q1 2021 with a combined transaction value of US$878 billion — an increase of 48 per cent when compared to the same quarter last year.
This means that, for Q1 2021, TMT M&A deals accounted for approximately over a third of the total deal value, at 36.8 per cent.
The most notable themes that drove deals in the majority of sectors during the quarter, Parida claimed, include connectivity, big data, cloud, COVID-19, cyber security, drug development, digital banking, health and wellness, as well as digitalisation.
While the TMT sector had the highest overall deal value and volume, the medical devices sector had the highest yearly growth in deal value during the period and the pharmaceutical industry saw the highest growth in deal volume.
“Companies in the medical, healthcare and pharma sectors have been evaluating their strategic priorities and existing portfolio to manage the longer-term pandemic COVID-19 impacts by investing in digitalisation or divestments,” Parida said.
“In contrast, the foodservice, consumer, retail, and construction sectors recorded a drop in M&A activity in terms of deal value recorded in Q1 2021 compared to the same quarter last year.”
Meanwhile, M&A deal reached a total value of US$2.8 trillion during 2020, a decline of 6 per cent compared to 2019, with 32,285 deals taking place.
However, it must be noted that the overall M&A market turned around in the last two quarters of 2020. In fact, Q4 2020 registered the highest level of activity GlobalData has seen for the last five years, with 9,371 deals taking place with a collective value of $1 trillion.
“2020 was a landmark year for M&A activity and this is expected to continue at a high level throughout in 2021, as companies across sectors focus on their key technologies and adjust to the realities of the COVID-19 pandemic,” Parida added.
This turn around during the third and fourth quarters of 2020 is in line with analysis made by other firms, with consulting giant PwC also claiming back in January that the second half of last year saw M&A activity accelerate, and that the momentum would continue through to 2021.