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M&A monitor

Q1 2021

M&A monitor

2021 gets off to a flying start

In our first M&A monitor of 2021 we take a deep dive into SPAC transactions, which have risen to become one of the principal drivers of global deal-making.

We calculate just how much M&A activity SPACs are responsible for, examine what underpins their explosive growth and look at what this primarily US phenomenon means for the rest of the world. In researching the trend we discovered some startling statistics, including that US SPACs have spent more on overseas targets in the past three months than in the previous 20 years combined.

As far as Q1’s deal data is concerned, the bull run that began in Q3 2020 shows no signs of slowing. M&A between January and the end of March broke the $1tn barrier for the third consecutive quarter. Q1 may eventually end up as the largest three-month period on record once the final numbers are reconciled.

The biggest deals of the year so far have involved operating companies (see table), with the top two in the transportation sector: Irish aircraft lessor Aercap’s acquisition of rival GE Capital Aviation Services for $31.2bn, and Canadian Pacific Railway’s $28.7bn buyout of Kansas City Southern.

Perhaps the most eye-catching mobility transaction however was the de-SPAC merger between Churchill Capital IV and electric vehicle startup Lucid Motors, which is the largest de-SPAC deal to date. The merger valued Lucid at $11.8bn, although once the private investment in public equity (PIPE) financing is added, the actual valuation stands at $24bn. TMT was the top sector once again, accounting for around 30 percent of global M&A activity by both value and volume.