Merger and acquisition (M&A) activity with emerging markets involvement reached £637.4bn during the first half of 2021, the highest total since records began in 1980, according to Refinitiv Deals Intelligence. The total marks a strong bounceback from 2020, when emerging markets M&A slumped compared with 2019. The first half of 2021 saw a 68% year-on-year increase, by deal value.
Deals involving firms in China, Brazil and India accounted for the majority of activity, at 57% of emerging markets M&A. Increases in activity in countries such as South Africa and Brazil offset declines in economies such as Russia and the United Arab Emirates. Cross-border activity has also come back to life, up 96% year-on-year to $221.7bn.
Private equity continues to increase its influence in emerging markets M&A, accounting for 17% of activity in this period and totalling a record $110.3bn, more than double 2020 levels. So-called megadeals, M&A activity worth more than $5bn, have also soared to $171.1bn – a 72% increase compared with 2020 and the strongest first half for megadeals on record. There were 16 deals of $5bn or more in the first half of 2021, accounting for 27% of all activity by value.
The technology sector continues to be a major driver of M&A, accounting for $150.9bn of deals, almost a quarter of total activity. It was followed by energy and power deals, at $91.4bn, accounting for 14% of activity.
Emerging markets activity has followed the same trend seen globally, one of record-breaking levels of deal-making. At a global level, there was $2.8tn of M&A in the first half of 2021, a 13% increase on last year and the highest total on record. The second quarter of 2021 was also the fourth consecutive quarter to surpass $1tn.
The US continues to account for a substantial share of global activity at $1.35tn-worth of deals, just under half of the global total and a 250% year-on-year increase. There have also been substantial increases in other countries too. The UK, accounting for the third largest individual country share of global activity, has increasingly seen its firms targeted for deals, with M&A involving a UK firm increasing by 101% year-on-year to $167bn. Canada, accounting for the fourth-largest individual country share, saw M&A involving Canadian firms increase by 509% year-on-year to $92.6bn. At a regional level, Europe accounted for the second-largest share of activity (after North America) with $580.8bn of M&A and Asia-Pacific at $561.9bn.
As with emerging market M&A, cross-border activity has substantially picked up internationally, increasing to $485.4bn during the first half of 2021, a 95% year-on-year increase and the strongest opening period for this type of activity since 2018.
