Life returns to the M&A market
After six months of gloom, Q3’s M&A data offers a glimmer of hope. Quarterly deal value rose for the first time this year, with $786bn of transactions announced between July and September, $346bn more than between March and June.
The total for Q3 even outstrips the corresponding period last year, with the increase from Q2 tracking the beginning of the economic recovery that has followed the easing of lockdown restrictions around the world.
There was a resurgence in big-ticket deals across the quarter, with 10 $10bn+ acquisitions, including one over $40bn. US corporates and sponsors were responsible for seven of the 10, with activity among US buyers increasing almost fivefold between Q2 and Q3 from $76bn to $358bn.
TMT was the most active sector (as it has been for six of the last seven quarters), accounting for more than 40 per cent of activity by value and 28 per cent by volume. 7-Eleven’s $21bn buyout of US gas-station-and-convenience-store-chain Speedway pushed consumer and retail into second place in the value table, followed by industrials and healthcare. After being such a strong performer in recent years the latter has dropped to sixth position for 2020 overall, reflecting the dearth of mega-mergers that have come to define healthcare M&A.