How 2021 was a record year for M&A

The global mergers and acquisitions (M&A) market has had a banner year.

With a renewed focus on opportunities, the total M&A deal value reached an all-time high of $5.9tn in 2021, according to a Bain & Company report.

Strategic deals – which include corporate M&A and private equity portfolio add-ons – saw the value amount to $3.8tn, an increase of 47 per cent year-over-year in 2021. Meanwhile, deals involving special purpose acquisition companies, or SPACs marked a compound annual growth rate of 174 per cent from 2020 to 2021.

“The year 2021 brought record-breaking M&A deal values. Some buyers were motivated by the plethora of available assets and low cost of capital; others jumped into the fray to stay competitive,” the report added.

“In our global survey of 281 executives, a full 80 per cent noted that deal activity was part of their broader business strategy in 2021, and more than half (52 per cent) cited the availability of attractive assets on the market as a driver of deals.”

Meanwhile, the regional landscape put up a stellar performance as well. A total of 665 deals were recorded across the Middle East in FY 2021, up 51 per cent from 439 recorded in 2020, while deal values for 2021 amounted to $89.8bn, up 58 per cent from $56.7bn recorded during the previous year, a report by law firm Baker McKenzie revealed.

Domestic M&A deal volume grew 81 per cent to reach 241 in 2021, from 133 deals in 2020. Meanwhile, the US took the lead, ruling inbound and outbound cross-border M&A as the top acquirer and target country by volume and value for FY 2021.

Omar Momany, partner and head of the corporate and M&A practice group at Habib Al Mulla & Partners, a member firm of Baker & McKenzie International, said: “We have seen a strong second half and a successful full year driving momentum across all markets in the Middle East with 2021 figures indicating that values and volumes are set to further uphold their sturdy momentum in 2022. This was driven by new deals in traditional sectors such as oil and gas as well as deals in emerging sectors including high technology, fintech, digital platforms, e-commerce, healthcare and education.

“While the M&A market remains hard to predict, relatively speaking, the Middle East is one of the regions in the world that is set for dealmakers to continue to invest in the above mentioned futuristic sectors that are well positioned to succeed.”