[Asia Economy Reporter Park Byung-hee] As the global economy rapidly recovered from the COVID-19 phase this year, the mergers and acquisitions (M&A) market also experienced a record boom. Companies, expecting an economic recovery, embarked on large-scale investments to expand their size.
Deutsche Bank forecasted that the M&A market boom will continue for the next several years, stating that this year is just the beginning.
According to Bloomberg on the 4th (local time), Berthold Fuest, co-head of Deutsche Bank's M&A division, said in an interview, "I believe this is just the start of a global M&A boom that will continue for the next several years," adding, "M&A activities will become more active in the coming years."
According to Bloomberg's data, the global M&A volume in the third quarter reached $3.8 trillion. Although the fourth quarter remains, it is close to the all-time high record of $4.1 trillion set in 2007.
Fuest's basis for expecting a long-term boom in the M&A market lies in digital transformation and environmental, social, and governance (ESG) investments.
He said, "As technological transformation takes place, companies in all industries must adapt their business models to the digital era," and predicted, "Thanks to companies' digital transformation demand, M&A deals ranging from $1 billion to $10 billion will significantly increase."
Fuest also mentioned that despite central banks reducing asset purchases, raising benchmark interest rates, and supply chain disruptions caused by the spread of COVID-19, corporate executives are confidently pursuing M&A.
Furthermore, Fuest explained that companies' ESG investments, especially the transition to eco-friendly energy, are another reason for anticipating the M&A market boom.
He stated, "Awareness of ESG is becoming a new driving force in the M&A market, opening up a new market currently," and explained, "Companies are in a situation where they must reinvest and redistribute capital to comply with ESG investments."
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