The merger and acquisition (M&A) world has endured and recovered from past economic crises, including the recent traumas such as the burst of the .com bubble in 2000-2002 and the great recession of 2007-2009. Ruby Datum explores M&A transaction history across some of the biggest industry sectors whilst understanding the true impacts on the industries of COVID-19.

What is a merger and acquisition?

Let’s start at the beginning, a merger occurs when two separate entities combine forces to create a new, joint organisation. An acquisition refers to the takeover of one entity by another. Recent examples of mergers and acquisitions include Consilio and Xact Data Discovery(XDD). Consilio and XDD merged and were acquired by Stone Point Capital.

How was 2020?

2020 was the year no one expected. Despite this, there were winners amongst the losers. The industry sector with the most M&A deals in 2020 was the technology sector with an increase of 487.2%, up $USD 590.2Bn from 2019. Conversely, M&A deals in the pharmaceutical, medical and biotech industry declined in 2020 by 42.9% to $USD 279.1. Further, 2020 saw the lowest level and value of deals and since 2013.

Although an overview of the year looks gloomy, let’s uncover how the data breaks down across the globe.

Mergers and Acquisitions – Europe

It’s not all doom and gloom in Europe, 2020 saw some positives in Europe with certain industries reporting growth. Despite the fact that the overall number of deals decreased, the value increased. Certain sectors such as Technology, Industrials and Chemicals, Telecomms, Financial services and Business services increased in value by at least 23% and up to 318% in the Telecomms sector. 

Mergers and Acquisitions – UK

The UK reaped successful M&A transactions in 2020 despite recording the lowest number of deals in a year since 2017, with the top 25 highest value deals accounting for 50% of 2020 total deals whilst the value of domestic deals increased from £9Bn to £10.8Bn. The best news is that throughout the pandemic, M&A deals regained momentum towards the end of the year in Q4, so there is optimism leading into 2021 in the UK. 

Mergers and Acquisitions – North America

North America Technology and Telecommunications sectors have been leaders of the pack with M&A deals for 2020 with an increased value of deals up 57% from 2019, specifically, the Technology sector has increased by 53%. However, The Media, pharmaceutical, medical and biotech sectors and financial services declined by at least 21% over the year. While 2020 saw the lowest value of deals since 2013, Thoma Bravo/ RealPage announced the largest buyout of $USD 9.5Bn in 2020.

Mergers and Acquisitions – Asia Pacific

The Asia Pacific region saw growth in M&A deals with a 26.1% increase in y-o-y deal value with the technology sector leading the way, increasing by 51%. However, the Financial services saw a small decrease of 7%. Again, whilst the value increased over the year, the number of deals declined, showing opportunities for larger scale acquisitions.

Mergers and Acquisitions – Japan

More specifically in Japan, 2019 saw the highest number of M&A deals with 2020 declining by 7%, yet the value of those deals increased by 60.8%. Both the Industrial and Chemical industry alongside the Technology industry declined in 2020 by at least 28%. Conversely, the Financial and Consumer sectors deals increased by 394% and 127% respectively. 

Mergers and Acquisitions – Middle East/Africa

Last but not least, the Middle East and Africa region saw an increase in Financial services, Energy, Mining and Utilities and the Consumer sector, rising by 199%, 39% and 21% respectively, whereas the Industrials and Chemicals and Technology sectors declined by 89% and 44% respectively. 

2021 Expectations

As the world starts to reopen, it is clear that the pandemic has resulted in a shift in the number of deals, however, the value of those deals has globally increased. With this opportunity, it is clear that 2021 is set to be an exciting year for M&A deals. 

How can Ruby Datum help with your M&A transactions?

With M&A transactions being the main use of Virtual Data Rooms it is clear that this technology is being confidently adapted by law firms. Moreover, the role of cyber security has been enhanced during the COVID-19 era in M&A procedures as in-person negotiations are unable to occur. Awarded the ISO9001 and ISO27001 cyber security accreditation in addition to a two-factor authentication (including hardware-based) and rigorous security testing by a CREST accredited company, Ruby Datum is committed to providing a quality and secure platform and service. Furthermore, with fast and bespoke integrations for your business, alongside user specific permission features, Ruby Datum’s Virtual Data Rooms are the ideal storage location for your highly confidential data. 

Keep your eyes pealed for more in-depth reports into each region coming soon!

Get in touch with Ruby Datum today for all your Virtual Data Room needs