Paul Weiss Rifkind Wharton & Garrison and Stikeman Elliott were the top mergers and acquisitions (M&A) legal advisers in the metals & mining sector for H1,2021 by value and volume, respectively.
Paul Weiss Rifkind Wharton & Garrison advised on four deals worth US$2.9 billion, which was the highest value among all the advisers. Meanwhile, Stikeman Elliott led in volume terms having advised on ten deals worth US$1.3 billion. A total of 755 M&A deals were announced in the sector during H1,2021, according to GlobalData.
According to GlobalData’s report, ‘Global and Metal & Mining M&A Report Legal Adviser League Tables H1 2021’, deal value for the region increased by 18.2% from US$22 billion in H1,2020 to US$26 billion in H1 2021.
Aurojyoti Bose, Lead Analyst at GlobalData, comments:
“Stikeman Elliott was the only advisor to have double-digit deal volume. Despite this, the company lagged behind its peers in terms of value and had to settle for the seventh position in the list of top ten advisors by value.
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“Meanwhile, Paul Weiss Rifkind Wharton & Garrison, which advised on relatively fewer deals, was the only adviser that managed to surpass the US$2 billion mark. Paul Weiss Rifkind Wharton & Garrison’s average deal size stood at US$719.3 million, as compared with Stikeman Elliott’s average deal size of US$130.7 million.”
Ashurst occupied the second position in terms of value with two deals worth US$1.9 billion, followed by Noerr with two deals worth US$1.7 billion, Clifford Chance with one deal worth US$1.7 billion and Jones Day with two deals worth US$1.6 billion.
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Cassels Brock & Blackwell occupied the second position in terms of volume with eight deals worth US$502 million, followed by Blake Cassels & Graydon with six deals worth US$1.1 billion. Paul Weiss Rifkind Wharton & Garrison occupied the fourth position by volume, followed by Davies Ward Phillips & Vineberg with four deals worth US$1.5 billion.
H1 Deal activity touches pre-covid levels as Q2 witnesses rebound in deal value
A total of 18,146 deals worth US$1.9 trillion were announced globally during H1 2021, which was higher than H1 2019’s deal value. Deal value, which witnessed decline in Q1 2021 compared to Q4 2020 also makes a rebound and grew by 6% in Q2 2021.
Moreover, Q2 2021’s deal value is by far the highest value recorded across any second quarter since 2019. Although market conditions still remain volatile in some of the countries, vaccination rollout in key markets such as the US seemed to have been crucial in boosting investor confidence.
Big ticket deals played a crucial role in driving the overall deal value
Announcement of big-ticket deals drove the total deal value for H1 2021. An analysis of deal size composition reveals that US$5 billion + deals worth of US$772 billion were announced during H1 2021, which is already close to 70% of the total value of deals announced in this range during the entire 2020.
Similarly, value of deals in the range of US$1-5 billion stood at US$658 billion for the region during H1 2021, which is now already close to 80% of the total value of such deals announced during 2020. This is a testimony of growing investor confidence in some of the markets such as the US.
Wide disparity in deal-making sentiments across regions
While deal value increased globally in Q2,2021 compared to Q1,2021, not all the markets witnessed growth and deal activity varied across different regions. Although deal value declined in most of the key markets during Q1,2021 compared to the previous quarter, North America and Asia-Pacific were the only two regions to witness rebound and showcased growth in deal value during Q2 2021.
In contrast, Europe, Middle East and Africa and South and Central America regions witnessed double-digit decline in deal value, with South and Central America registering the highest decline.
Digitalization and cloud themes continue to be on investors’ radar
Of all the technology themes, the highest number of M&A deals were announced in digitalization theme during H1 2021. With COVID-19 outbreak prompting adoption of technology, digitalization has come to the forefront while companies with innovative cloud solutions are also emerging as attractive acquisition targets. A total of 289 M&A deals involving targets active in the digitalization space were announced during H1 2021 closely followed by 262 deals involving targets active in cloud space.
All the sectors witness improvement in deal value
Investor sentiments have been improving and against this backdrop, all the sectors witnessed improvement in deal value during H1,2021 compared to H1,2020. Similarly, all sectors except foodservice also witnessed growth in deal volume. Meanwhile, technology sector continued maintaining the lead with the sector alone claiming for around 30% of the total deal value as well as volume. Meanwhile, pharma, medical and healthcare sectors topped in terms of growth in deal value and volume.
Cross-border activity makes steady strides amid heightened protectionism
Despite geopolitical tensions, heightened protectionism and enhanced regulatory scrutiny of foreign investments in some specific sectors, cross-border M&A is making steady strides with deals between different countries remaining at decent levels during H1,2021. A total of 5,266 cross-border M&A deals worth US$613 billion were announced during H1,2021, which is already around 60% of 2020’s total cross-border activity.