- Amazon — MGM
- AT&T — Discovery
- Microsoft — Nuance
- Zendesk — Cleverly
- Hyundai — Boston Dynamics
- Ericsson — Vonage
- Rogers — Shaw
- Stripe — Recko
- NatWest — RoosterMoney
- DoorDash — Wolt
- Pfizer — Arena
- CP — KCS
2021 was a smashing year for M&A activity. In sharp contrast to the first year of the pandemic, 2021 soared to historic heights with a whopping 62.193 deals adding up to the unprecedented figure of $5.8 trillion — and beating the previous 2007 record by over a trillion.
What brought about this dealmaking frenzy?
Factors behind the rise in M&A activity
Mostly, what we saw was a combination of factors — some clear and quantifiable, others more subjective. Worth pointing out are:
- Low interest rates in the US and elsewhere — a powerful driving force
- A bullish recovery stock market
- A need for adaptation brought on by the pandemic
- The momentum of change
Worth noting are two other headline-worthy tendencies in 2021: SPACs and PE firms.
- SPACs started the year strong, with an $88 billion worth of deals in Q1 (although quickly turning into a spent force when faced with an onslaught of regulations).
- Private equity, on the other hand, forged ahead and was responsible for some 30% of deal value.
But across industries everywhere, the big merger and acquisition news was how the greatest beneficiaries of the pandemic were quick to convert their gains, pressing full steam ahead for new deals and into new markets to ensure future growth.
Below is our take on some of the top M&A deals 2021 gave us. Some are milestones in their own fields, some illustrate trends to watch out for, and some were just gargantuan operations that we’d be remiss not to mention.
One of the success stories of the pandemic — the streaming industry. With Netflix’s meteoric rise and the spawning of multiple streaming alternatives, this will be a lively market for some time to come. Two operations stand out in this sector among the many mergers and acquisitions deals 2021 brought forward.
Amazon — MGM
Amazon’s streaming service, Prime Video, was already seen as one of the tough competitors Netflix should keep an eye out for. That was further confirmed when Amazon announced it was acquiring MGM, one of the oldest, best-known Hollywood studios.
With the closing of the mammoth $8.45 billion deal, Amazon bolstered its repertoires with classics such as Pink Panther, Fargo and the Rocky movies. And oh, yes: now Amazon gets a say on who will be the next James Bond. How’s that for an acquisition?
AT&T — Discovery
After its 2016 acquisition of Warner Media, US telecom giant AT&T moved on to acquire Discovery — a newcomer into the streaming world. The $43 billion deal will see Warner and Discovery merged into a new media company that is likely to stay with us for a long time.
Tech was the single biggest sector of M&A activity 2021 saw, upwards of $1 trillion and up 64% over the previous year. Key deals were heavy on cybersecurity, cloud storage, 5G infrastructure, and the game-changing AI. The question “What companies are merging in 2021?” did not lose its relevance for a moment in tech.
Microsoft — Nuance
As Microsoft CEO Satya Nadella said of the acquisition, “AI is technology’s most important priority, and healthcare is its most urgent application”.
Its future may be still uncertain due to antitrust regulation in the UK, but if it moves to completion the mammoth $19.7 billion acquisition of AI and speech-to-text technology innovator Nuance would be one of the biggest in the sector — as well as Microsoft’s second biggest acquisition after LinkedIn.
Zendesk — Cleverly
With its acquisition of the Portuguese artificial intelligence startup Cleverly, Zendesk is looking to further improve its automatic-response workflow. Once again, Zendesk proves its commitment to remaining one of the big names in customer service software.
Hyundai — Boston Dynamics
You may know Boston Dynamics thanks to the videos of its dancing robot-dogs. Well, guess what — now the robotics pioneer has been acquired by none other than Hyundai Motor Company.
As recently reported by Forbes, the president of the Korean company, Chang Song, sees a future where robots will collaborate closely with humans in a variety of tasks — sort of like “superhuman” helpers. Let’s just hope their robots remember Asimov’s Three Laws.
AI, 5G, and cloud computing are the three big trends in Telecom — and they were duly represented in some of the biggest recent M&A deals 2021 witnessed.
Ericsson — Vonage
The Swedish telecom pathbreaker made headlines with its $6.2 billion purchase of Vonage, a provider of cloud-based communications. The merger was celebrated by the CEO of Vonage, Rory Read, as bringing about transformation based on “the convergence of the internet, mobility, the cloud and powerful 5G.”
Rogers — Shaw
While currently under the scrutiny of several Canadian regulatory agencies, the $26-billion deal announced last March would cement even further the hold of Canada’s “Big Three” Telecom companies over the sector.
If it comes to fruition, the acquisition of Shaw Communications will boost Rogers Telecommunications’ 5G capabilities, giving it a leg up over the competition and further confirming one of the major trends of the pandemic — the big get bigger, faster.
Banking and financial services
The pandemic was a turning point for fintech. “We witnessed the power of digital banking, … breaking through with great force and taking a big part of the market away from traditional banks”, says Veronica Crisafulli, CEO of Mo Technologies. As expected, the trend reflected in the M&A world.
Stripe — Recko
One of the main names in Fintech these days, Stripe welcomed its acquisition of Indian financial operations platform Recko as “the latest milestone in Stripe’s expansion beyond payments acceptance, bringing millions of users another tool to manage and grow their revenue.”
Now joined with Stripe, Recko helps internet companies automate several aspects of their billing cycle, including calculating commissions and payouts.
NatWest — RoosterMoney
Here is another pandemic-driven trend: people learning about personal finance. Besides the retail-investment boom, where many started learning to invest for lack of ways to spend money, people have also become more finance-aware.
This is where apps such as RoosterMoney come in, helping parents give children early notions of finance: interest rates, saving, and whatnot. The acquisition of RoosterMoney by a major bank showcases this learning trend as well as another one: Banks are having to adapt fast to a booming digital environment.
As we all know, this was another sector to greatly benefit from the pandemic. With restaurants struggling to stay afloat everywhere, usage of delivery apps increased severalfold — and it doesn’t look to slow down anytime soon.
DoorDash — Wolt
DoorDash is another of those nouveau-household names — again, we have the pandemic to thank for that. As the largest food delivery company in the US, it has continued its expansion after going public, recently announcing the acquisition of Finnish delivery platform Wolt. With the $8.1 billion deal, the American giant is projected to soon start tapping into the European market.
One of the sectors closest associated with the pandemic stayed largely quiet in terms of M&A in 2021. Contrary to what might have been expected, some significant demerging took place, such as Johnson & Johnson’s spinning out a new company for its consumer health business.
That said, this is one trend that looks like it could change soon, with pharmaceutical companies flush with cash for the new year.
Pfizer — Arena
Pfizer requires no description: If a billion people have your product in their systems, you are naturally a name to be reckoned with. In the end of 2021, the behemoth of the vaccine world announced it will be acquiring Arena Pharmaceuticals, a company specializing in the treatment of immuno-inflamatory diseases.
The move shows clearly that one of the great success stories of the pandemic has no intention of going away. In a moment of great liquidity, Pfizer is using the momentum to invest in long-term growth that is sure to impact the pharma world.
The transportation and logistics world saw a massive 84% increase in deal volume over 2021. This growth is closely connected to that of the e-commerce sector, as the supply chain copes with unseen-before levels of warehouse-to-consumer movement. That plus US government investment in infrastructure spending made for a big push forward.
CP — KCS
In a $31 billion operation, Canadian Pacific is buying Kansas City Southern. The move is set to join Canada, the US, and Mexico through a single, twenty-thousand-mile railway system, and will likely inject new dynamism into supply markets across North America.
However history looks back on 2021, there is little question that the past year saw one of the most exuberant recoveries on record.
As the Bloomberg M&A report indicates, just the value of deals both announced and completed within the year makes for a formidable $2.1 trillion. Talk about impetus.
And while 2022 promises to be a calmer, more solid year as interest rates are hiked and industries slow down, one thing is for sure: The impact of last year’s record M&A activity will be felt for years to come.