In the face of seismic changes, it’s easy to feel unmoored—and a global pandemic can certainly breed uncertainty. Even so, corporations and private equity firms spent an unprecedented $5 trillion on mergers and acquisitions in 2021. Perhaps the way to stay afloat in a sea of change is by working together.
Mergers and acquisitions (M&A) have been a powerful tools in business to expand capabilities and remain viable, which we discussed in our previous report released at the onset of the pandemic. We believed that recovery would be asymmetrical and that sectors would have to reinvent themselves. We imagined that mergers and acquisitions would be a key part of those efforts—and they were, to the tune of $5 trillion spent on M&A activities in 2021.
This makes sense in the context of a crisis. A company’s actions during a crisis can be broken into three stages: responding, recovering, and thriving. Transformation and M&A were key parts of many companies’ response and recovery strategies, and we believe M&A could also help to determine whether companies will thrive.
Part of what is useful about M&A strategies is that they give companies an avenue to complete a broad set of goals even as they navigate previously uncharted paths. We may be living in a post-pandemic world, but global conflict, climate change, technology shifts, and other trends will continue to test business models across different sectors.
Based on our research from the original "Charting new horizons" report, we’ve developed an M&A framework based on defensive and offensive deal archetypes that could build resilient business models and accelerate transformation.