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5 January, 2022

The seven cross-border M&A deals that shaped 2021

M&A came roaring back in 2021 after a bumpy, Covid-dominated 2020. Here, Investment Monitor identifies the deals that stood out.

By Sofia Karadima

The volume of mergers and acquisitions (M&A) deals in 2021 surpassed the figure for 2020, according to GlobalData’s deals database, hinting that the business world is adapting to the new normal that has emerged in the aftermath of the Covid-19 pandemic. 

This uptick in activity has been seen across both domestic and cross-border markets. Domestic deals have remained dominant, but there have also been some significant international deals. 

Investment Monitor has identified the key cross-border deals across seven different sectors that shaped 2021. 

Transport, infrastructure and logistics

Canadian Pacific Railway to acquire Kansas City Southern 

Canadian Pacific Railway announced that it has agreed a deal to acquire Kansas City Southern, the US- headquartered transportation holding company that has railroad investments in the US, Mexico and Panama, for $31bn (C$39.3bn). This deal is notable because it will create the first railroad connecting the US, Canada and Mexico. 

Healthcare and pharmaceuticals

ICON acquires PRA Health Sciences 

ICON, an Ireland-headquartered provider of outsourced drug and device development and commercialisation services, has acquired the US contract research organisation PRA Health Sciences for a cash and stock transaction valued at approximately $12bn (€10.6bn). 

The combined company, which is a healthcare intelligence and clinical research organisation, will operate under the name ICON and will bring together 38,000 employees across 47 countries. This is a significant deal because it consolidates two key players in the market, leading to greater operational scale, which will enable “all customers to reduce their development time and cost”, according to the press release

Technology, media and telecommunications

Hitachi acquires GlobalLogic 

Hitachi, the Japan-headquartered conglomerate, has acquired digital engineering services company GlobalLogic, which is based in the US, for $9.5bn (Y1.1trn). This is a key deal for Hitachi as the acquisition will help to create synergies across the all of the sectors the organisation is active in, such as IT, energy, mobility and automotives.

Financial services

Exor and Covea sign memorandum of understanding for the sale of PartnerRE 

French mutual insurer Covea has signed a memorandum of understanding to acquire global reinsurer PartnerRe from the Netherlands-headquartered Exor, a holding company controlled by the Agnelli family. The sale of PartnerRE amounts to $9bn. This acquisition comes as Covea is looking to “anticipate the evolution of the global insurance environment through international growth and through the diversification of products, risks and geographies”, according to a press release

Aerospace and defence

Parker Hannifin to acquire Meggitt 

Parker Hannifin, a US organisation specialising in motion and control technologies, has signed an agreement to acquire Meggitt, a UK-headquartered provider of aerospace and defence motion and control technologies, for $8.8bn. 

This deal comes as Parker Hannifin is looking to strengthen its engineering offering across the aerospace and defence sector. Nevertheless, the deal has triggered security concerns in the UK. More specifically, “acting on official advice, the Secretary of State issued a public interest intervention notice to intervene in the proposed transaction on national security grounds”, according to a document seen by Investment Monitor

Energy

Vinci to acquire energy business from ACS 

French construction company Vinci has signed an agreement to acquire the energy business of ACS Group, a Spanish company focused on civil engineering and construction, for $5.5bn. The press release states that the two organisations have “have identified new opportunities for the short and medium term, of about 15 gigawatts of energy, mainly in solar PV and onshore wind, as well as around 8 gigawatts from upcoming offshore wind projects”. 

Vinci is looking to become a global player in energy contracting by developing a platform for renewables projects, broadening its portfolio of concessions and extending its average maturity. 

Real estate

ESR to acquire ARA Asset Management 

Hong Kong-headquartered ESR Cayman, a logistics real estate platform, has announced the acquisition of real estate fund manager ARA Asset Management for $5.2bn (HK$40.5bn).  

This is a key deal as the ESR-ARA transaction is set to create the largest real asset manager in the Asia-Pacific region and the third-largest listed real estate investment manager in the world, with combined assets under management of $131bn. 

The vision behind this transaction is to “build a leading fund manager focused on technology-enabled real estate, especially logistics and more recently data centres, on the back of major secular trends including the rapid rise of e-commerce, digital transformation and the financialisation of real estate in Asia-Pacific,” said ESR chairman Jeffrey Perlman in a press release.

Deals in transport, infrastructure, healthcare, technology, financial services, aerospace and defence, energy and real estate have played a key role in shaping the M&A landscape in 2021. What is more, there have also been interesting cross-border deals in many more sectors, such as apparel and footwear, travel and tourism, consumer goods, oil and gas, food services and mining.  

Looking ahead to 2022, Investment Monitor expects there to be more cross-border M&A deals as investors look to spread their geographical reach in order to diversify their investments and reduce risk. 

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