Global M&A Report 2021
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Letter from the Bain M&A Team: How Did You Deal?
Deals got trickier and more critical for growth in 2020.
Dear friends,
Welcome to the third annual edition of our Global M&A Report. Our mission remains constant: Use
our unique position in the M&A world to connect what we see in our clients’ executive suites with the
larger trends happening across the globe. The result, we hope, is to make all of us a little better at the
craft of M&A.
We were humbled in our efforts to assess all that happened in 2020, and we believe that it will be several
years before we fully understand the long-term ramifi cations of a year during which every aspect
of the corporate M&A process was disrupted. In this year’s report, we untangle the jumbled trends,
distinguishing between the outcomes that were temporary by-products of the historic moment and
those that signify longer-term changes.
As in previous crises, companies that were nimble and prepared to quickly adjust seized the oppor-
tunities in 2020. A lot of M&A got done last year, more than 28,500 deals, but it was not easy. For
example, as almost 70% of our M&A practitioner survey respondents pointed out, doing diligence
remotely was particularly diffi cult.
How did you, our readers, do it? We saw many of you embrace digital collaboration tools and creatively
employ locally stationed talent to get high-quality deals done. Many teams similarly adapted in-fl ight
integration programs and successfully transitioned to the virtual working environment. While tech-
nology will never fully replace the in-person elements of dealmaking, many of the new virtual ways
of working for M&A processes are here to stay.
The year 2020 saw the continuation and, in many cases, the hastening of longer-terms trends. Overall
M&A was down in 2020. Certainly, the pandemic played a big role in this, but the truth is that M&A
appears to have peaked in 2018. One question now is: Will M&A activity accelerate out of this trough
as the world recovers?
Capability-driven deals have grown over the past fi ve years to 15% of all large deals, a near-sevenfold
increase. We think this is in response to the ongoing business model disruptions across several sectors.
The crisis in 2020 made it even more expedient for companies to bring in-house critical capabilities
in areas such as online delivery, telemedicine, and teleconferencing (to name a few), thereby strength-
ening their value proposition. And we note that corporate venture capital activity, another route for
companies to acquire capabilities at an early stage, hit a new all-time high in 2020.
Other ongoing trends that accelerated include increased regulatory involvement and scrutiny
of deals. The superabundance of capital continued to drive high valuations and a favorable deal
fi nancing environment.
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