The M&A market might hit a record this year
Deal-making activities globally might hit a record of around $6 trillion this year as businesses proceed to adopt affordable financing while recovering from the pandemic. KPMG said that the global organizations, as well as acquisition volumes, exceeded $4.4 trillion this year. According to Refinitiv data, it moved closer to its all-time high of $4.9 trillion set 6 years ago.
It indicates a surge from a total of $3.8 trillion reached in 2020. head of transactions for Singapore and KPMG partner, Stephen Bates, said that he could not see any sign of it slowing down. On Friday, Bates told CNBC that, at the moment, the M&A market seems turbocharged.
This year, financial services, the technology, industrials, and energy sectors estimate for most deals led essentially by private equity and corporates or particular purpose acquisition organizations.
SPACs have no commercial operations while solely raising capital from investors to acquire one or two operating businesses.
They use the cash to consolidate with a private company and deliver it public while trying to accumulate capital in an initial public offering.
According to Bates, the U.S. still manages to estimate for the majority of deals. However, Europe managed to record the fastest growth at around 50% this year. In the meantime, Asia grew by almost 20% this year.
Deals` surge appeared in contrast with the stagnant growth in the middle of the coronavirus pandemic. This current pandemic situation led businesses to start searching for alternative sources of growth.
According to the KPMG survey in September, eight out of ten, equal to 87%, CEOs consider inorganic means as their primary source of growth in the next couple of years. The report noted that inorganic growth models involve acquisitions and mergers, strategic alliances, and joint ventures.
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