The latest edition of Lex Mundi’s annual M&A trends report shows that despite Covid-19 triggering international travel restrictions, national lockdowns and the widespread adoption of remote working practices, global M&A activity continued at record levels during 2021.
Published in January by Lex Mundi’s Cross-Border Transactions Group (CBT), the Global M&A Trends Report 2022 pulls together insights from across 66 jurisdictions and across 13 sectors and shows that contrary to expectations the pandemic caused no slow-down in global M&A activity and forecasts unprecedented levels of global M&A activity 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 previous year. Across most regions, practitioners agreed that due diligence was of paramount importance to doing deals in 2021 – 73% of practitioners in the Middle East and Africa, 62% of practitioners in Asia, 45% of practitioners in Latin American and the Caribbean and 42% of practitioners in Europe all cited it as a key area of focus for legal advisers.
On the other hand, according to 54% 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 antitrust regulations standing out for respondents in Asia. A total of 46% of respondents agreed that it was at the forefront of minds. As for national security/foreign investment, 37% of all European practitioner respondents agreed that it was a key concern when doing deals in 2021.
Speaking of the report’s findings, 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 polarized 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 General Counsel and their in-house teams to better understand and prepare for the challenges and opportunities ahead.”
The report also looks at deal activity by market and across sectors such as financial services, technology and software, and life sciences healthcare. Across all regions, most Lex Mundi member law firms expect to witness as much, if not more, deal activity in both public and private M&A during 2022.
During lockdown Lex Mundi launched the innovative Lex Mundi Equisphere service delivery model, designed for significant cross-border projects effectively enabling clients to design their ideal global law firm based on legal matter and jurisdictional advice needed. Lex Mundi Equisphere allows member firms to join forces through a digital workspace to enable a single accessible flow of information, with key documents and data on a shared, easy to access dashboard.
For further insight into the trends and 2022 predictions from Lex Mundi’s member firms across each of those key regions, download the third annual edition of the Lex Mundi Global M&A Trends Report.