Global merger and acquisition (M&A) activity surpassed all-time highs in 2021, far beyond the previous high-water mark established over 15 years earlier, as availability of funds and sky-high valuations fuelled frenzied levels of dealmaking.

According to Dealogic statistics, the value of M&A globally surpassed $5 trillion for the first time, with volumes increasing 63% to $5.63 trillion by December 16, significantly exceeding the pre-financial-crisis peak of $4.42 trillion in 2007.

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“Corporate balance sheets are incredibly healthy, sitting on $2 trillion of cash in the US alone — and access to capital remains widely available at historically low costs,” said Chris Roop who co-heads North America M&A at JPMorgan.

Technology and healthcare, which generally account for the largest proportion of the M&A market, led the way in 2021, fueled in part by pent-up demand from last year, when the pace of M&A activity plummeted to a three-year low owing to the global financial impact from the COVID-19 outbreak.

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According to Dealogic, total deal volume in the United States almost doubled to $2.61 trillion in 2021. Europe had a 47% increase in dealmaking to $1.26 trillion, while the Asia Pacific saw a 37% increase to $1.27 trillion.

Following a year of lockdowns, Wall Street’s major investment banks encouraged dealmakers to meet with more customers in person in order to secure lucrative mandates to combine firms or defend them from activist investor raids.

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Following a record-breaking year, bankers are now anticipating a large bonus round in early 2022.

Breaking apart corporate conglomerates and empires proved to be a profitable business for investment banks as well.

General Electric, Johnson & Johnson, and Toshiba were among the huge corporations that announced intentions to split up their main operations and spin-off various sections in the second half of the year.

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Borrowing costs are generally expected to rise in the coming months, with the US Federal Reserve saying that rates would be raised next year to battle growing inflation. Nonetheless, bankers anticipate that dealmaking will remain active.

Top deal advisers are concerned about the repercussions from the US Federal Trade Commission’s (FTC) more combative approach toward merger activity over the last year, with Nvidia’s proposed $40 billion buyouts of British chip manufacturer Arm among the latest projects it is attempting to scuttle.

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Despite the difficulties, the year ahead provides plenty of chances, as the market for special purpose acquisition companies (SPACs) has just reopened, with fresh listings in Europe, following regulatory scrutiny in the US.