https://ift.tt/344CnRw M&A Volumes Surpassed $5 Trillion For The First Time In 2021 – Cryptovibes.com – Daily Cryptocurrency and FX News

After a historic year for merger and acquisition (M&A) activity that was fueled largely by the easy availability of cheap financing and booming stock markets, Global deal-making is set to maintain its scorching pace in 2022.

For the first time, Global M&A volumes comfortably eclipsed the previous record of $4.55 trillion set in 2007, topping $5 trillion, Dealogic data showed. The overall value of M&A, up 64% from a year earlier, stood at $5.8 trillion in 2021 according to Refinitiv.

As records tumbled during each month of the year, it struck 62,193 deals in 2021, up 24% from the year-earlier period, flush with cash and encouraged by soaring stock market valuations, large buyout funds, corporates, and financiers.

Despite looming interest rate hikes, the deal-making frenzy is expected to continue well into this year by investment bankers. M&A activity may be slowed down by higher interest rates which may increase borrowing costs. Nevertheless, deal advisers still expect a flurry of large mergers in 2022.

A stock market rally and company executives having access to cheap financing, which in turn emboldened them to go after large targets, were fueled by accommodative monetary policies from the U.S. Federal Reserve.

Regardless of a tougher antitrust environment under the Biden administration, the United States led the way for M&A, accounting for nearly half of global volumes – the value of M&A nearly doubled to $2.5 trillion in 2021.

The largest deals of the year included AT&T Inc’s (T.N) $43 billion deal to merge its media businesses with Discovery Inc (DISCA.O), the $34 billion leveraged buyouts of Medline Industries Inc, Canadian Pacific Railway’s (CP.TO) $31 billion takeover of Kansas City Southern (KSU.N), and the breakups of American corporate behemoths General Electric Co and Johnson & Johnson (JNJ.N).

Even with challenges posed by regulations and the pandemic, over two-thirds of participants believe deal volumes will grow, according to a survey of dealmakers and advisers by Grant Thornton LLP.

The bulk of M&A volumes was accounted for by deals in sectors such as technology, financials, industrials, and energy and power. For the first time, according to Refinitiv data, buyouts backed by private-equity firms more than doubled this year to cross the $1 trillion mark.

Deal-making involving special purpose acquisition companies (SPAC) further boosted M&A volumes in 2021 despite a slowdown in activity in the second half. Taking the global M&A volumes into context, SPAC deals accounted for about 10% and added several billions of dollars to the overall tally.