"Even Doing Nothing Is Risky"... Global M&A Deals Reach 4,400 Trillion Won in First Half

Industrial Restructuring Accelerates Around AI

Fewer Small and Mid-Sized Deals... Surge in 'Mega-Deals'

Some Raise Concerns About a 'Winner's Curse'

The total value of global mergers and acquisitions (M&A) transactions in the first half of this year reached 4,400 trillion won. Despite various uncertainties, companies have been making aggressive bets as industrial restructuring accelerates around artificial intelligence (AI).

"Largest Half-Year Total Since COVID-19"

The Financial Times (FT) in the UK reported on July 1 (local time), citing data from the London Stock Exchange Group (LSEG), that the global M&A volume reached 2.83 trillion dollars (approximately 4,399 trillion won) in the first half of this year. This is an increase of 49% compared to the same period last year. It surpasses the first half of 2021 (2.74 trillion dollars), which saw an investment boom following COVID-19, marking the highest figure on record.

There were a total of 47 mega-deals, each valued at over 10 billion dollars. This is a 62% increase from the same period last year and the highest number since LSEG began compiling related statistics in 1980. In contrast, the total number of deals dropped by 9% year-on-year, reaching the lowest level since 2020. While small and mid-sized transactions declined, the market was dominated by large-scale deals.

M&A activity was most vigorous in the U.S. and European markets. The transaction value in the U.S. rose by 77% year-on-year, while Europe saw a 105% increase. In contrast, the Asia-Pacific region fell by 2.4%, showing relatively weak performance.

'Mega-Deal' Surge... Driven by AI Technology

On the 12th of last month (local time), SpaceX employees cheered when the company was listed on the New York Stock Exchange. Photo by Reuters Yonhap News

AI technology has been cited as a major driver behind the increase in mega-deals. As competition to build AI data centers intensifies, there have been a series of strategic acquisitions aimed at securing power, infrastructure, and software.

For instance, Dominion Energy and NextEra Energy merged to launch a U.S. power company with a market capitalization of 420 billion dollars. SpaceX, immediately after its initial public offering (IPO), acquired AI coding software firm Cursor in a stock swap deal worth 60 billion dollars. Other major deals included Fox Corporation’s acquisition of Roku, and the merger between Unilever’s food division and McCormick.

Additionally, the Trump Administration’s easing of antitrust regulations has further fueled deal activity. As the U.S. government has operated corporate merger reviews more flexibly than before, an environment has emerged in which companies can actively pursue large-scale M&A.

Among companies, there is a growing awareness that it is more important to act strategically than to be paralyzed by uncertainty. Charlie Bucart, Global Head of M&A at JPMorgan Chase, said, “Companies are recognizing that doing nothing itself is a risk.”

Steve Baronoff, Global Head of M&A at Bank of America (BoA), also commented, “Corporate boards are now at the stage of asking, ‘Is there anything we’re missing?’” He predicted that the current boom could continue until 2027.

However, warnings have been raised that companies may face the “winner’s paradox” as they must pursue both AI transformation and the integration of mega-deals simultaneously. Global consulting firm Bain & Company evaluated, “In the age of AI, competitiveness will depend less on the M&A itself and more on how quickly synergies can be generated through AI after the acquisition.”

Meanwhile, global investment banks (IBs) are also expected to benefit from the increase in large-scale transactions. Goldman Sachs is projected to earn the highest advisory fees, having advised on deals worth over 1 trillion dollars in the first half of the year.

This content was produced with the assistance of AI translation services.