There was just something about the pandemic that started a fire under mergers and acquisitions. Things really got rolling in September of 2020 when M&A activity took off like the proverbial rocket.

By the end of 2021, $945 billion in deals were inked. That represents a volume that was 2.5 times larger than the same period for 2020. All experts agree these big deals will keep going through 2022. With that in mind, it is interesting to note some key trends and what to expect for M&A activity going forward.

Virtual Deal Making
The COVID situation forces big PE companies and other investors to travel a lot less, if not at all. In-person walkthroughs of assets being offered were also put on hold. To keep things moving forward, investors dug in and developed virtual walkthroughs, held Zoom meetings, and implemented other modes of remote operation.

With the pandemic expected to wind down, these new virtual protocols are likely to continue. Now that the M&A community has figured out how to make deals remotely, it just makes sense to keep doing it. It saves time, travel expenses, hassles, and much more.

Global Regulatory Changes
Official scrutiny and oversight of mergers and acquisitions are increasing. A lot of that is due to new rules and regulations regarding borders between nations. In fact, increased tensions between locations are cited as the No. 1 concern by C-suite executives. It has brought to the forefront intellectual property rights issues, a complex issue we won’t delve into here.

The Era of ESG Continues to Rise
Sustainability is no longer a buzzword or empty happy talk by corporate leaders. That means ESG – Environment, Social, Governance – is fast becoming a core principle for more and more industries. Governments are pressing hard for private businesses to curb their carbon emissions, reduce waste, minimize pollution, and more. 

Add to that the fact that consumer consciousness is changing rapidly. More people are demanding products that are eco-friendly and carbon neutral. Companies that don’t cater to the sustainability mindset of their target markets will find themselves at a disadvantage against companies that do an excellent job with ESG.

Looking ahead to 2022, full-bore merger and acquisition deals will charge forward. Growth is expected to dominate the M&A sector and mentality. It’s all about making smart and strategic deals to bolster one’s own position.