Executive Summary/Highlights

• Global M&A activity in 2020 was a remarkable tale of two halves, with historically low M&A volume in the first half of the year, especially in the months following the initial outbreak of the coronavirus pandemic, followed by an explosion of activity in the second half of the year. In the wake of unprecedented efforts to respond to the coronavirus pandemic across the world, including office closures, stay-at-home and quarantine orders and travel restrictions, the first two quarters of the year saw the second lowest first-half global M&A volume in the last decade.  As economies tepidly reopened, therapeutics improved and vaccines proved viable, M&A volume rebounded in the last two quarters of the year, resulting in the second highest second-half global M&A volume in the last decade.
• For the second half of the year, global M&A volume reached US$2.4 trillion, a 90% increase from the first half of the year (US$1.2 trillion), and a 34% increase from the second half of 2019 (US$1.8 trillion). The second-half surge in M&A activity helped global M&A volumes reach US$3.6 trillion in 2020, the fifth highest annual total in the last decade.
• Global M&A volume was US$1.3 trillion in Q4 2020, a 15% increase from Q3 2020 (US$1.1 trillion), and a 31% increase from Q4 2019 (US$974 billion). Q4 2020 M&A volume was the second highest fourth-quarter volume since 2007 (US$1.1 trillion), the highest quarterly volume since Q4 2015 (US$1.4 trillion) and 33% higher than the average fourth-quarter volume of global M&A over the last 10 years (US$958 billion).
• Not surprisingly, the sectors with the highest M&A volume over the last 12 months were High Technology, Financials and Energy & Power, sectors that produce desirable products and services for an era of remote communication and uncertainty. Over the last 12 months, these three sectors represented US$684 billion, US$496 billion and US$431 billion of global M&A volume respectively, and in the aggregate accounted for 44% of global M&A volume.  Deals in these sectors include Advanced Micro Devices’ US$35 billion acquisition of Xilinx, Aon’s US$30 billion acquisition of Willis Towers Watson and ConocoPhillips’ US$13 billion acquisition of Concho Resources.
• M&A activity in 2020 saw non-U.S. parties participate as both targets and acquirers in some of the largest deals of the year, which resulted in cross-border transactions representing four of the 10 largest deals of 2020. Cross-border M&A volume was US$471 billion in Q4 2020, an increase of 31% from Q3 2020 (US$359 billion), and an increase of 40% from Q4 2019 (US$335 billion), and US$1.3 trillion in 2020, an 11% increase from 2019 (US$1.1 trillion).  For the second half of the year, cross-border M&A volume was US$830 billion, an 87% increase from the first half of the year (US$444 billion), and a 33% increase from the second half of 2019 (US$626 billion).
• U.S. M&A volume was US$1 trillion in the second half of the year, a 159% increase from the first half of the year (US$393 billion), and a 56% increase from the second half of 2019 (US$654 billion).
• Large and mega deal M&A volumes were US$790 billion and US$802 billion in the second half of the year, respectively, representing increases of 165% and 84% from the first half of the year (US$298 billion and US$437 billion), and 46% and 56% from the second half of 2019 (US$542 billion and US$515 billion), respectively.
• M&A volumes in the fourth quarter increased in the United States (up 33%), North America (up 38%) and Europe (up 36%) and declined in the Asia-Pacific (excluding Japan) region (down 16%) and Japan (down 72%), in each case from Q3 2020.
• The largest deals in 2020 were S&P Global’s US$44 billion acquisition of IHS Markit, Nippon Telegraph and Telephone’s US$40 billion related-party acquisition of NTT DOCOMO and NVIDIA’s US$40 billion acquisition of UK-headquartered ARM.  Other noteworthy transactions included AstraZeneca’s US$39 billion acquisition of Alexion, salesforce.com’s US$27 billion acquisition of Slack Technologies and Seven & i Holdings’ US$21 billion acquisition of Speedway.

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