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Reproduced from PricewaterhouseCoopers; Chart: Axios Visuals

The coronavirus-induced recession led to a decline in deals during the first half of the year, but global firms are quickly coming off of the sidelines and setting in motion major changes to their business strategy, according to a new research from PwC.

Why it matters: Business leaders are laying out the blueprint for the future of commerce in the U.S. and around the world right now and trends are starting to emerge.

What happened: Deal activity in the second quarter saw the largest year-over-year decline since the dot-com recession in 2001.

  • But volumes have risen every month since May and mega deals already have been announced in July, including Berkshire Hathaway’s nearly $10 billion acquisition of Dominion Energy and semiconductor maker Analog Devices’ plans to buy rival Maxim Integrated Products for more than $20 billion.

The big picture: Tech is driving the market and size is incredibly important, as big companies are expected to begin making significant investments and are embracing newer technologies earlier than in previous cycles, PwC notes.

What they're saying: "Through the rest of 2020, we expect private equity to become even more active. As deal processes renew and investors put $2.6 trillion to work, private equity deal volume likely will return to its long-term average of about 20% to 25% of total US deal volume."

  • "The same pattern is emerging with respect to well-capitalized corporate investors, especially in the tech sector."

The intrigue: PwC highlights an important characteristic of this recession — in previous downturns the first step following the recession was that companies with sufficient resources would acquire ailing competitors. This was generally followed by a period of transformational deals, in which companies tried to adapt their business models to the realities of the new business environment.

  • "In the current crisis, however, we are seeing both trends unfold in tandem."

What's next: "Looking ahead, tech companies will likely be among those driving M&A’s recovery, both as acquirers and as targets."

  • "With their outsized access to capital, many firms are well-positioned to make deals poised to reshape emerging sectors."

Go deeper

Oct 29, 2020 - Economy & Business

Exclusive: Insider Inc. buys majority stake in Morning Brew in all-cash deal

Morning Brew

Insider Inc., the parent company to Business Insider, closed an all-cash deal Thursday to buy a majority stake in Morning Brew, a media startup that focuses on business newsletters and podcasts.

Why it matters: It's an unusual success story amid a bleak media landscape. Morning Brew's co-founders, both under 30, raised very little capital upfront to launch their business but still managed to be quite profitable.

Trading platforms curb trading on high-flying Reddit stocks

Major trading platforms including Robinhood, TDAmeritrade and Interactive Brokers are restricting — or cutting off entirely — trading on high-flying stocks like GameStop and AMC Entertainment.

Why it matters: It limits access to the traders that have contributed to the wild Reddit-driven activity of the past few days — a phenomenon that has gripped Wall Street and the country.

2020 was the economy's worst year since 1946

Source: FRED; Billions of chained 2012 dollars; Chart: Axios Visuals

One of the last major economic report cards of the Trump era lends perspective to the historic damage caused by the pandemic, which continued to weigh on growth in the final quarter of 2020.

By the numbers: The U.S. economy grew at a 4% annualized pace in the fourth quarter, a sharp slowdown in growth compared to the prior quarter. For the full year, the economy shrank by 3.5% — the first annual contraction since the financial crisis and the worst decline since 1946.