2021 was a record year for global M&A market: Lex Mundi

Lex Mundi, a global network of independent law firms, has launched the latest edition of its annual report on the key trends for global mergers and acquisitions (M&A).

The Global M&A Trends Report 2022 draws upon insights gathered from practitioners across 66 jurisdictions. It found that, despite the pandemic, 2021 saw a record year for deal activity. Through an analysis of M&A deal activity across seven to 13 sectors, with a breakdown for each region, the report concluded that we should expect further, unprecedented global growth in 2022.

While the pandemic has continued to impact the wider market and M&A deal terms over the course of 2021, its impact has diminished from the preceding year. Across nearly all regions, practitioners agreed that due diligence was of paramount importance to doing deals in 2021 – 73 per cent of practitioners in the Middle East and Africa, 62 per cent of practitioners in Asia, 45 per cent of practitioners in Latin American and the Caribbean and 42 per cent of practitioners in Europe all cited it as a key area of focus for legal advisers.

On the other hand, according to 54 per cent of respondents in North America, transaction structure was highlighted as the most pressing concern. The regulatory environment also continues to be a top priority for practitioners, with anti-trust regulations standing out for respondents in Asia – 46 per cent of respondents agreed that it was at the forefront of minds. As for national security/foreign investment, 37 per cent of all European respondents agreed that it was a key concern when doing deals in 2021.

The report also showcased deal activity by market and across sectors such as financial services, technology and software, and life sciences and healthcare. Across all regions, the majority of member law firms expect to witness as much, if not more, deal activity in both public and private M&A during 2022.

Jenny Karlsson, Lex Mundi’s head of North America within the Global Markets team, said: “Although global deal flow continues to be influenced by the pandemic, a number of other factors appear to have eclipsed it amongst the concerns of practitioners – most notably, restrictions on foreign investment in an increasingly polarised world.

“Nevertheless, we have found that the mood is remarkably bullish, with optimism for further growth across most jurisdictions and markets in both the public and private sphere. We hope the insight from this report will assist teams to better understand and prepare for the challenges and opportunities ahead.”

Meanwhile, the Middle East also recorded strong M&A activity with 665 deals in FY 2021, up 51 per cent from 439 witnessed in 2020, revealed a recent study by law firm Baker McKenzie.

Read: Middle East M&A activity scales 51% in 2021