Global M&A Industry Trends in Technology, Media & Telecommunications

Renewed optimism in the TMT sector as companies use M&A to adapt to an increasingly virtual world

M&A activity in the technology, media and telecommunications (TMT) space slowed slightly overall during the first half of 2020, but dealmaking accelerated in the second half of the year. Following the initial uncertainty created by the COVID-19 pandemic, a return in confidence saw M&A activity pick up sharply and sent deal values in the technology and telecommunications sectors soaring.

Even as vaccines are rolled out, the pandemic continues to affect all aspects of the economy—from daily life for individuals to the conduct of business for major corporations. With strict physical distancing measures still in effect and business practices adapting in response, companies are adopting technology solutions at a brisk pace. Many major TMT incumbents have largely resumed merger and acquisition activities to meet that demand and fuel growth, despite the risk of regulatory and geopolitical scrutiny. However, entertainment subsectors such as cinema, theatre and live events continue to experience significant operational challenges. The resulting distress within these subsectors may drive M&A activity across the TMT landscape as many companies look to restructure in 2021.

We remain bullish on the industry’s M&A outlook for 2021. Although everyday life will eventually stabilise as the rollout of vaccines progresses, the pandemic has accelerated the adoption of TMT offerings. Companies will continue to consider deals as a way to reshape their businesses and maintain or attain market leadership in an increasingly virtual world.

“The technology sector continues to create value in an increasingly digital world, reinforced by changes imposed by the global pandemic. This will spur innovation that leads to more M&A transactions as companies look to diversify their value proposition and/or reinforce their market position.”

Marc SuidanGlobal Technology, Media & Telecommunications Deals Leader, Partner, PwC US

M&A hotspots

We expect to see the following M&A hotspots trending across TMT:

  • The semiconductor sector, buoyed by high stock prices, is likely to see more companies use their stock as a key currency to consolidate and build scale to stay competitive. The attractiveness of the semiconductor space reflects increased demand for NAND and DRAM as companies pursue memory-intensive areas such as 5G, data centres, cloud computing and the industrial Internet of Things (IoT).
  • Video game companies increased sales during the pandemic, with destigmatised consumer adoption even from the non-gaming community. Similarly, consumer demand has risen for app-based food-delivery services. We expect these trends to continue, leading to more M&A and IPO activity to capture the growing value and opportunities presented by these business models.
  • The shift to online banking has accelerated with many consumers and workers still mostly at home. Although traditional banks’ operations have been adversely impacted by COVID-19, companies in the fintech space have thrived, driving many acquisitions and minority stakes. As credit card activity remains largely virtual and consumers spend more online, we expect to see more M&A transactions and investments in the payments space.

Key themes driving M&A activity

Acceleration of pre-existing trends

While technology solutions have always played a significant role in M&A activity, the challenges posed by COVID-19 have transformed tech from a ‘nice to have’ to an absolute necessity. On the B2B side, tech subsectors that have benefited from this trend include cloud computing, e-commerce, SaaS and IT security—many of which were already doing well prior to the pandemic. We’ve also seen a separate contingent of companies benefit from the growth of remote work and stay-at-home orders, with e-commerce, streaming services, gaming and video conferencing all experiencing an increase in user engagement. This effect has been somewhat proportional to the severity of lockdown. The trend has been less pronounced in China, for instance, where restrictions have eased considerably in recent months and people have been able to return to work and other activities.

The tech sector’s strong position under the pandemic has led to an increase in M&A activity, higher valuations, historic levels of venture capital (VC) funding and numerous tech IPOs in the second half of 2020. As we move closer towards an end to the pandemic, we see no evidence that the tech sector’s strong performance and competitive deals environment will moderate any time soon.

Strong valuations across all types of investment

Stock market indices around the world largely bounced back in 2020, but none so much as technology indices. The NASDAQ Composite had its best year since 2009, gaining 43% in 2020 [2]. This fuelled a number of developments within the TMT sector that affected deals:

  • High valuations fuelled consolidation in the semiconductor space, with all four megadeals comprising all-stock or partial-stock deals.
  • A large number of technology IPOs took place, taking advantage of high valuations to raise funds and lock in investor returns. Three of 2020’s IPOs—Airbnb, DoorDash, Snowflake—were among the ten largest US-based tech IPOs of all time.[3] In Asia, IPO proceeds for Hong Kong’s HKEX exchange topped $50 billion in 2020, up 25% on 2019,[4] led by TMT IPOs such as Chinese e-commerce company[5]
  • 2020 has emerged as a record-breaking year for special-purpose acquisition companies (SPACs), which raised about $70 billion in capital and accounted for more than half of all US IPOs. This structure allows companies to take advantage of high valuations by providing a quicker pathway to market than the traditional IPO route. It typically targets high-performing assets in hot, tech-enabled segments.
  • High valuations have been mirrored in VC investments, with venture-backed companies receiving historic amounts of funding. Asia saw the largest growth in funding and new deals.[6]

With such high valuations, buyers need to have clearly defined value creation plans so that they can maximise the potential of the acquired asset. The increasing importance of environmental, social and governance (ESG) factors is also changing the value of technology businesses and their relative attractiveness to investors. Several technology and telecommunications companies have expanded their efforts to manage waste and reduce energy consumption to address environmental, sustainability and climate change concerns.

Geopolitical and regulatory concerns

While it is too early to predict the impact of a new US presidential administration or further developments in trade relations with China, we expect geopolitical and regulatory headwinds will continue to impact M&A activity trends in 2021.

In the US, regulatory pressure on large tech incumbents is mounting. CEOs of big tech companies were called to testify in Congress multiple times throughout 2020. At the end of 2020, the US Federal Trade Commission[7] and 46 states[8] filed lawsuits alleging that Facebook is an illegal monopoly. Societal issues such as public safety and privacy are also focusing attention on the technology industry. China is also exercising regulatory oversight of public companies and those seeking IPOs. Although regulatory pressures appeared to do little to reduce deal activity during the second half of 2020, they may curb enthusiasm for cross-border M&A transactions, megadeal activity and further consolidation of platforms going forward.

Increasing trade tensions may impact investments overseas by Chinese investors, particularly investments that relate to technology and other sensitive national security concerns. US regulators continue to draw a hard line against the acquisition of key US technologies, and several countries in Europe have increased their scrutiny of potential Chinese investments. India also made a move to limit the tech presence of China within its borders when it banned a large number of Chinese apps in July 2020, citing security concerns.[9]

Circuit board

Technology, Media & Telecommunications M&A outlook

Advances in technology such as industrial IoT, artificial intelligence, driverless cars and cloud computing will shape the future, but not until network capabilities have expanded and sufficient broadband infrastructure exists globally.

Telecommunications companies are already progressing in the 5G rollout in anticipation of these demands, and we expect to see further consolidation in this space as companies compete at a global scale.

A healthy queue of technology companies are still looking to go public in 2021. We anticipate that this will provide ample consolidation opportunities among companies looking to expand their service offerings or solidify their positioning in the market. We expect the biggest beneficiaries of consolidation to be the large technology companies, though increased regulatory oversight could limit megadeals in some more heavily scrutinised subsectors.

With the TMT sector proving to be exceptionally resilient to the COVID-19 environment and with considerable further potential for consolidation, we believe that TMT M&A activity will continue to be strong in 2021 and beyond.

[1] Market Data Overview’, Shanghai Stock Exchange, accessed 12 January 2021,
[2] Emily Graffeo, ‘US stocks close at record highs to end tumultuous 2020’, Markets Insider, 31 December 2020, accessed 12 January 2021,
[3] Ari Levy, ‘Three of the 10 biggest tech IPOs have happened in 2020 — including two in the last week’, CNBC, 12 December 2020, accessed 12 January 2021,
[4] ‘PwC: Total IPO fund raised in Hong Kong predicted hit historical high in 2021’, PwC, 4 January 2021, accessed 12 January 2021,
[5] Grady McGregor, ‘JD Health shares jump 60% after becoming Hong Kong’s largest IPO of 2020’, Fortune, 8 December 2020, accessed 12 January 2021,
[6] MoneyTree Report, PwC/CB Insights, Q3 2020, accessed 12 January 2021,
[7] Devin Coldewey, ‘FTC seeks to break up Facebook, alleging illegal monopoly’,TechCrunch, 9 December 2020, accessed 12 January 2021,
[8] Taylor Hatmaker, ‘Facebook hit with massive antitrust lawsuit from 46 states’, TechCrunch, 9 December 2020, accessed 12 January 2021,
[9] Sherisse Pham, ‘India bans more Chinese apps as tensions remain high’, CNN Business,25 November 2020, accessed 12 January 2021,
[10] ‘HHS Issues New Report Highlighting Dramatic Trends in Medicare Beneficiary Telehealth Utilization amid COVID-19’, U.S. Department of Health and Human Services, 28 July 2020, accessed 12 January 2021,
[11] Brooks Barnes and Nicole Sperling, ‘Warner Bros. Says All 2021 Films Will Be Streamed Right Away’, New York Times, 3 December 2020, accessed 12 January 2021,
[12] Frances Josephine Espeso and Stefen Joshua Rasay, ‘European Media, telecom M&A activity increase 5.9% YOY in August’, S&P Market Intelligence, 23 September 2020, accessed 12 January 2021,
[13] Manish Singh, ‘Google to invest $10 billion in India’, TechCrunch, 13 July 2020, accessed 12 January 2021,
[14] Manish Singh, ‘Amazon to invest $2.8 billion to build its second data center region in India’, TechCrunch, 6 November 2020, accessed 12 January 2021,
[15] ‘Japan’s NTT considers taking mobile unit private in $38bn deal’, Aljazeera, 29 September 2020, accessed 12 January 2021,

About the data
We have based our commentary on M&A trends on data provided by industry-recognised sources. Specifically, values and volumes referenced in this publication are based on officially announced transactions, excluding rumoured and withdrawn transactions, as provided by Refinitiv as of 31 December 2020 and as accessed on 3 January 2021. This has been supplemented by additional information from Dealogic and our independent research. This document includes data derived from data provided under license by Dealogic. Dealogic retains and reserves all rights in such licensed data. Certain adjustments have been made to the source information to align with PwC’s industry mapping. We define megadeals as transactions with a deal value greater than US$5 billion.

Contact us

Marc Suidan

Marc Suidan

Global Technology, Media & Telecommunications Deals Leader, PwC United States

Brian  Levy

Brian Levy

Global Deals Industries Leader, PwC United States

Alvin Bao

Alvin Bao

China Technology, Media & Telecommunications Deals Leader, PwC China

Nick George

Nick George

UK Technology, Media & Telecommunications Deals leader, PwC United Kingdom

Jens Weber

Jens Weber

Germany Technology, Media & Telecommunications Deals Leader, PwC Germany

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