Dec 21, 2021 - Economy

What to expect after record-shattering year for mergers and acquisitions

An illustration of a briefcase with a tall stack of money.

Illustration: Sarah Grillo/Axios

2021 isn't quite over yet, but it's already been a record-shattering, eviscerating, gralloching year for mergers and acquisitions.

Driving the news: Global M&A topped $5.5 trillion through last Thursday, including more than $2.4 trillion for U.S. targets, per Refinitiv.

  • And that was before Oracle agreed to pay $28 billion for Cerner or BMO agreed to pay $16.3 billion for Bank of the West. Preliminary year-end data will be released by Refinitiv late next week.
  • For context, global M&A never previously topped $3.5 trillion. The prior U.S. peak was around $1.55 trillion.

Private equity-backed deals also hit new highs, topping $1 trillion for the first time ever. Ditto for venture capital (almost no matter how you define it) and SPACs.

What to know: This isn't just about the dollars, which could be partially explained away by equity valuation inflation. There's also been an unprecedented number of deals, topping 58,000 globally and 14,400 in the U.S.

Look ahead: Dealmakers say that 2022 will be another very strong year, but there are reasons to expect at least a little pullback.

  • Some of those are things that will happen next year, like interest rate hikes and a contentious U.S. election season.
  • Some are about 2021 being in the sweet spot for deal activity, which 2022 won't match. For example, deals got pulled forward into 2021 because of tax code change concerns. And there also were deals that should have gotten done in 2020, but were delayed for COVID reasons.

The bottom line: Yeah, gralloching.

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