PwC's Deals Sector Leader John Potter and other partners discuss the deals outlook for the rest of 2021.
It’s hard to imagine it’s been over one year since the global COVID-19 pandemic began to disrupt our lives. Global economies have braced themselves for the last 14 months as countries were plunged into severe damage-control mode to weather the social and economic hardships wrought by the pandemic. As we approach the end of the first half of 2021, it is safe to say that a new normal is upon us. Global M&A has seen a strong resurgence in the first half of 2021, driven by historic M&A activity in the first quarter of 2021. Industrial manufacturing M&A has followed a similar trend with deal value increasing by 91% in the first half of 2021 compared to the first half of 2020, while deal volume decreased by 18% over the same period. Deals in the first half of 2021 were driven by the need to access capital to scale up early-stage technology-driven ventures as well as by the traditional need for M&A focusing on driving scale and product-portfolio expansion.
The rapid development and rollout of the COVID-19 vaccines in the U.S. has fueled an overall optimism that the worst of the pandemic is behind us. The U.S. economy has shown greater signs of recovery than other major economies due to the vast supply and rapid distribution of the vaccine within the country. As the US continues to open during the second half of 2021 — and as other countries begin to recover from the social and economic impact of the pandemic — we expect deal activity to resurge on a global basis over the second half of 2021. Deal activity within the US (on both a target and acquirer level) provided a major boost to global M&A. However, as other global economies continue to recover, we anticipate that cross-border transactions will return and drive dealmaking to higher levels. The second half of 2021 should provide a snapshot of how players in M&A will begin to navigate in a post-pandemic world.
“SPAC mergers continue to be the preferred source of capital for early stage industrial tech companies looking to blitz scale their operations.”
Industrial Manufacturing Deals Leader, PwC US
Industrial Products Deals Leader, PwC US