M&A monitor Q4 2021: merger review, MAE litigation and navigating China

We explore deal data for 2021 and other key transactional trends in our year-end M&A monitor, which you can read here. In this edition we look at the influence of US acquirors on global dealmaking, how buyers are negotiating the challenges of investing in China, and reveal how cyber criminals are using imminent M&A deals as a trigger to launch ransomware attacks.

We also bring you two articles from our 2022 US Board Memo: the first pinpoints the key challenges for business of a more interventionist antitrust environment, while the second examines recent developments in the Delaware Courts around material adverse event (MAE) litigation. Alongside this you can take a deep dive into 2021’s top 50 M&A deals to see which industries are the most active and where the biggest assets were acquired.

Global dealmaking hits new high in 2021

As far as activity for the year is concerned, global M&A by value had hit $5.5tn by early December, eight percent higher than the previous annual record with three weeks of the year still to run. Deal volumes were up on 2020 but not by much, meaning the value of the average M&A transaction globally topped $100m for the first time, a rise of more than 36 percent year-on-year.

M&A value was up in every industry across the year, with industrials and materials and real estate (+59 percent) showing the biggest rise. Real estate is perhaps the most surprising success story amid a global health crisis that has kept millions away from work; activity in the sector bounced back strongly from a subdued 2020, pushing the value of the average real estate deal in 2021 almost 80 percent higher to $157m.

The numbers are remarkable given the factors dragging on deals, from inflationary pressure to tougher antitrust scrutiny on both sides of the Atlantic. However, these challenges are currently outweighed by incentives, not least the continued availability of cheap financing and the fact the equity markets are favoring deal activity. The stock prices of companies who have completed a deal this year are outperforming those who haven’t by more than two percent, according to a recent study.