Total technology industry merger and acquisitions (M&A) deals in the second quarter (Q2) of 2020 worth $65.23bn were announced globally. The value marked an increase of 27.2% over the previous quarter and a drop of 11.3% when compared with the last four-quarter average, which stood at $73.54bn.

This is according to a media statement by GlobalData, which tracks real-time data concerning all merger and acquisition, private equity/venture capital and asset transaction activity around the world from thousands of company websites and other reliable sources.

Comparing regions

Comparing deals value in different regions of the globe, Europe held the top position, with total announced deals in the period worth $28.52bn, the report says. At the country level, the UK topped the list in terms of deal value at $19.83bn, it says.

In terms of volumes, North America emerged as the top region for technology industry M&A deals globally, followed by Europe and then Asia-Pacific.The top country in terms of M&A deals activity in Q2 2020 was the US with 395 deals, followed by China with 91 and the UK with 84.

The Middle East and Africa’s technology industry saw a rise of 14.9% in overall deal activity during Q2 2020, when compared to the four-quarter average, says GlobalData.

A total of 177 deals worth $2.94bn were announced for the region during Q2 2020, against the last four-quarter average of 154 deals.

Deal volume increased marginally on the African continent in Q2 compared to Q1, although there was a significant decline in deal value, says GlobalData's Business Fundamentals Analyst, Montharapu Ramkumar. He notes that Q2 witnessed an announcement of 19 deals worth US$10.4m while Q1 witnessed announcement of 16 deals worth US$142.6m.

Investors/acquirers seem to have become more cautious in committing big-ticket investments amid the uncertainty due to COVID-19 outbreak, Ramkumar explains.

Deal types in Middle East and Africa

GlobalData says of all the deal types, venture financing saw the most activity in Q2 2020 with 134, representing a 75.7% share for the African region.

In second place was M&A with 38 deals, followed by private equity deals with five transactions, respectively capturing a 21.5% and 2.8% share of the overall deal activity for the quarter.

In terms of value of deals, M&A was the leading category in Middle East and Africa’s technology industry with $1.99bn, while venture financing and private equity deals totalled $925.5m and $27.96m, respectively.

Annual performance

GlobalData notes that the M&A industry is not coming out of 2020 unscathed. As of the end of Q2 2020, technology M&A deals worth $116.9bn were announced globally, marking a decrease of 36.5% year on year, it says.

The top five technology industry M&A deals accounted for 58.7% of the overall value during Q2 2020. The combined value of the top five technology M&A deals stood at $38.26bn, against the overall value of $65.23bn recorded for the month.

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