2020, a year dominated by uncertainty stemming from the COVID-19 pandemic, also upended the global M&A market. While global M&A has seen a recovery during the second half of 2020, the recovery in industrial manufacturing deal-making has been muted relative to other sectors. Industrial manufacturing M&A rebounded in Q320; however, deal-making in the sector cooled off in Q420 as a resurgence of COVID-19 hit the US, Europe, and parts of Asia. Overall, industrial manufacturing deal value and deal volume declined by a significant 40% and 28%, respectively, in 2020 compared to 2019. Deals in H220 were driven by access to capital in the form of private equity and special purpose acquisition company (“SPAC”), with a focus on innovation and scale.
PwC's Deals Sector Leader John Potter discusses the trends driving deals and outlook for 2021.
PwC's Deals Sector Leader John Potter discusses the trends driving deals and outlook for 2021. Explore national deals trends
The challenges and uncertainty experienced in 2020 due to COVID-19 will likely continue into 2021, as many of the world economies are facing a resurgence of the virus as we head into the New Year. However, with further progress being made on vaccines, there is hope that this uncertainty will be short-lived. We expect deal activity in 1H21 will continue to recover from sector lows seen during the peak of the healthcare and economic crisis. As we emerge from the pandemic, we anticipate M&A activity in the sector will continue to be fueled by access to emerging sources of capital, investment in innovation, and the right-sizing of operations to meet the new market demands of a post-pandemic world.
“Twenty twenty was a year filled with uncertainty due to COVID-19 which shook the M&A landscape. Deal makers have been forced to be creative and look forward to a post-pandemic world with the increased use of SPACs to raise capital and focus on technology transactions, which are trends that we believe are here to stay.”