share this article!

This is an excerpt from Forbes’ daily email Deal Flow, which covers huge buyouts, mergers, and the rest of Big Finance. Do you want a new issue delivered to your email every afternoon? Here’s where you may sign up.
1. A plethora of mergers
This week marked the end of the first half of 2021. It was a six-month period unlike any other in the world of mergers, acquisitions, and private equity.
So in today’s newsletter, we’re going to do something a bit different. Rather than rehashing the week’s highlights, we’ll look back at the full year of 2021 so far, which has been marked by meme stocks, tax negotiations, SPAC speculation, and media consolidation.
But it would be foolish of us not to begin with this simple fact: By a considerable measure, the first six months of this millennium saw more M&A activity than the first six months of any prior year.

This year’s M&A figures have been so outrageous that it’s been difficult to keep track of them.
getty
According to Refinitiv statistics, there were 28,175 M&A deals completed globally between January 1 and June 30. That’s a 27% increase over last year’s total and a 7% increase over the first six months of any previous year since 1999. And the total value of those transactions was a record-breaking $2.82 trillion, up 132 percent from last year, when the pandemic slowed activity, and nearly 20% more than the previous all-time high, established in 2007.
The figures are most striking in the United States, where deal value has increased by a staggering 264 percent year on year. However, the tendency holds true for deals in all markets and of all sizes. Takeover activity has increased in 2021, whether it’s in Africa or Asia, whether it’s mega-deals or micro-deals.
Marc Cooper, the CEO of investment bank PJ Solomon, summed up one of the most frenetic settings he’s ever witnessed in a few words.
“Transaction volume and prices are still up considerably, and there’s a whole heck of a lot of activity out there,” he said.
Several variables are fueling this surge of activity, and some of them haven’t changed since I first wrote about this year’s “merger frenzy” in early May. Here’s an example:
Over the last year and a half, the stock market has performed admirably, driving up public company valuations. This means that many targets will be more likely to sell because they will be able to achieve a better price; but, it also means that certain corporate buyers will be more likely to prospect since their own stock will be a more appealing currency.
With the introduction of hundreds of SPACs to add to the current pool of businesses and private equity firms, the market for potential purchasers has never been broader. After years of successful fundraising, those private equity firms have plenty of cash on hand. And many of the SPACs that have entered the market are already under pressure to close a deal within the two-year deadline before having to return funds to their investors.
Due to historically low interest rates, purchasers are finding it relatively easy to finance acquisitions in addition to their large cash reserves. The private finance markets withstood the pandemic’s pressures admirably and continue to be an appealing alternative for takeover targets.
Yes, the epidemic should undoubtedly be mentioned. Fears that the COVID-19 situation will lead to a true economic catastrophe slowed activity in the second quarter of last year. As a result, there was a backlog of transactions that had to be postponed until this year. The epidemic wreaked havoc on a variety of industries, altering the fortunes of hundreds of businesses for the better or for the worse. Deals are also driven by this: Some companies appear to have become more appealing, either as a result of their newfound strength or as a result of pandemic troubles that have made them targets for opportunistic purchases. Other businesses are rethinking their futures in the post-pandemic era, determining whether to sell assets or make acquisitions to expand into new markets.
Then there’s the possibility that the capital gains tax rate in the United States may be dramatically raised in the coming months, prompting many asset owners to sell now in order to lock in their earnings at a lower tax rate and keep as much money as possible out of Uncle Sam’s hands.
Any one of these reasons could cause an increase in deals on its own. When they all happen at the same time, new records are set.
Tony Balloon, a lawyer at the legal firm Alston & Bird who concentrates on cross-border M&A and other transactions, said, “It’s really sort of a perfect storm for everyone hurrying to get things done.”
To the ordinary Jane, all of this may seem a little abstract. What difference does it make to her life if the deals were worth $2 trillion or $2.8 trillion in the last six months?
To that precise question, the honest answer is probably “not much.” However, each of the more than 28,000 unique deals completed so far this year has the potential to improve our lives in some manner. If Jane enjoys watching movies on Amazon Prime at night, she should be aware that Amazon’s planned acquisition of MGM Studios will enhance her viewing possibilities. Jane’s rent may be affected by the planned mega-merger of local landlords Vonovia and Deustche Wohnen if she resides in Germany. If she passes the time by playing games on her phone, she would be interested to learn that Electronic Arts has spent billions on new mobile gaming assets so far this year.
As the agreements pile up, the chances that some of the pending mergers may alter the way we navigate the globe are increasing. Companies are people in our capitalist world. And those “people” have the potential to be a great force.
On that topic, let’s take a look at some of the other standout moments and lessons from this historic run…
2. The Mega-Ascension Deal’s
M&A agreements of all sizes have become more common in the last six months, as I have stated. But it’s the multibillion-dollar acquisitions that are booming. According to Refinitiv statistics, the most transactions worth between $1 billion and $5 billion in the first half of a year have ever been 322, as of 2021. That rate was 82 percent for M&A agreements worth more than $5 billion. Dealmakers have completed 422 low-billion-dollar acquisitions this year, with another 97 valued at least $5 billion. The cumulative value of those deals is likewise at an all-time high in both size buckets.
Last month, Blackstone, The Carlyle Group, and Hellman & Friedman agreed to buy Medline Industries for $30 billion, making it the largest buyout agreement of the year thus far. The move was reminiscent of private equity’s pre-financial crisis landscape around 2006 and 2007, given its size and the collaboration of three big private equity companies. Other such agreements, according to some experts, could be on the way.
“Obviously, it’s difficult for any single fund to write a multibillion-dollar payment,” said PJ Solomon CEO Cooper. “However, if you get a number of them and one of them is a billion-dollar check or a $750 million check, that’s a terrific way to put money to work quickly, especially for some of these mega-funds that are nearing $15 billion or $20 billion.”
3. Antitrust aversion
Mega-deals can be found all over the place. Regulators around the world, on the other hand, appear to be growing increasingly cautious of these massive transactions and the massive corporations that underpin them. Another significant topic to watch in 2021 has been a push of antitrust action against mega-mergers, with the most recent example being a growing concern that US regulators are going to scupper a $33 billion merger between insurance behemoths Aon and Willis Towers Watson.

Willis Towers is a luxury hotel in New York City. Watson’s proposed mega-merger with Aon may be in jeopardy.
Getty Images/SOPA Images/LightRocket
Regulators in the United Kingdom have expressed alarm over Nvidia’s intentions to buy chipmaker Arm for $40 billion, citing national security risks. The United Kingdom is also delaying Illumina’s $7.1 billion acquisition of cancer-testing startup Grail. The US Department of Justice tried to stop a deal between Visa and Plaid earlier this year, while the Federal Trade Commission recently compelled Speedway and 7-Eleven to sell over a portion of assets to avoid further investigation of a $21 billion deal. Then there’s the long-running tale of Washington, D.C. vs. Big Tech, with Amazon’s proposed acquisition of MGM Studios serving as the most recent battleground.
4. There are numerous public offerings.
An outright sale isn’t the only option for investors and entrepreneurs seeking an exit to take advantage of sky-high values or avoid prospective tax changes. So far in 2021, the IPO market has been flourishing, with companies like Coinbase, Bumble, Didi Chuxing, Petco, and Krispy Kreme leading the charge to Wall Street.
According to Renaissance Capital, as of July 2, IPOs in the United States had raised $79.9 billion in proceeds, which is already larger than all but one of the previous ten years. And there have already been 216 IPOs, breaking the previous decade’s high for IPO frequency. When everything is said and done—Robinhood and Instacart are just two of the companies that could go public in the coming months—2021 could be the most profitable year for IPOs ever.
5. The SPAC sluggishness
In the first few months of 2021, the tremendous SPAC boom of 2020 persisted. But then everything came to a grinding standstill. The rate of new SPAC issuances dropped by 90% when the SEC stated in early April that it was exploring new guidelines on SPAC IPOs.
Hundreds of SPACs that debuted in 2020 and early 2021, on the other hand, are still hunting for targets. Many firms are continuing to strike relationships with up-and-coming industries like electric autos or flying taxis. Others are on the lookout for bigger names. In April, the year’s largest blank-check merger occurred when Grab, a Singapore-based ride-hailing and payments company, agreed to merge with a vehicle funded by Alt Capital./nRead More

share this article!