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Laxman Pai, Opalesque Asia: PricewaterhouseCoopers (PwC) expects more megadeals - transactions of at least $5 billion in value - in 2021, from pharma companies acquiring early-phase or pre-commercial products in hot therapeutic areas to bank consolidation as low-interest rates persist, plus private equity (PE) acquisitions.
"The M&A recovery that began in the second half of 2020 will accelerate in 2021, as corporate and private investors have access to capital and can pursue deals to build scale and expand the scope," said the Anglo-American multinational professional services network of firms in its 'Deals industry insights'.
The surge in megadeals in the second half of 2020 has helped total US deal value bounce back strongly going into 2021. Of the 39 megadeals announced through mid-November, 29 occurred after July 1.
Corporate megadeals are happening in several sectors, and most involve buyers and sellers within the same sector, reflecting efforts to increase scale during the downturn, the report said.
As for total US deal volume, the roughly 13,000 US deals in the 12 months ending Nov. 15, 2020, were only slightly less than in 2019, even with a big lull in Q2 2020.
"Megadeals activity will come even as company valuations have increased from their COVID-19 lows - with the larger company multiples leading the way - compared with the declines seen in previous recessions. That raises the question of how soon, if ever, those deal...................... To view our full article Click here
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