Global M&A recovers on vaccine hopes and US election outcome

Global M&A recovers on vaccine hopes and US election outcome

According to the Financial Times, global mergers and acquisitions activity has been recovering amid hopes for a vaccine against COVID-19 and following the US presidential election. Both news releases contributed to resumed global deals, as well as mergers and acquisitions of large companies.

Notably, M&A is a general term that refers to two main types of financial transactions - mergers and acquisitions. Since November 9, many corporations across the globe have announced deals worth about $40 billion.

Bill Demchak, chief executive of PNC Financial Services, reported that the financial institution had acquired the US operations of Spanish rival BBVA for $11.6 billion. The Financial Times estimates that this is the second-largest deal in the last 12 years.

The banking sector revived after US biotech firm Moderna revealed trial data showing its coronavirus vaccine was 94.5% effective. Earlier, US drugmaker Pfizer and its German partner BioNTech, working on a vaccine against the coronavirus, reported on big progress in the area.

In addition, Canada’s gold miner Endeavour Mining has agreed to merge with rival Teranga Gold. This major deal is expected to amount to $1.86 billion. Italy's Nexi has followed suit, announcing that it is in exclusive takeover talks with Denmark-based payment services company Nets over a €7.2 billion deal.

Experts note that the period from October to December is traditionally strong for M&A activity. This is due to the fact that US and European dealmakers are seeking to get deals done by the end of the year. This year, business activity has slowed down due to the restrictive measures introduced to combat the coronavirus outbreak.

The fourth quarter of 2020 has been the third most active for M&A in the past 20 years, analysts point out. Since the beginning of October, companies have concluded agreements worth $612 billion. In 2019, the total volume of global mergers and acquisitions was less than $461 billion.


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