Tech, healthcare mega deals boost virus-stricken M&A market

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After adapting to working from home in the COVID-19 pandemic, cash-rich technology and healthcare companies have now mastered dealmaking from home.

FILE PHOTO: An NVIDIA logo is shown at SIGGRAPH 2017 in Los Angeles, California, U.S. July 31, 2017. REUTERS/Mike Blake/File PhotoShare this contentThis week, Nvidia Corp unveiled a US$40 billion agreement to acquire chip maker Arm Ltd from SoftBank Group Corp , while Gilead Sciences Inc inked a US$21 billion deal for biotech company Immunomedics Inc .

To be sure, U.S. M&A volume so far in 2020 is down nearly 50per cent on the same period in 2019, Refinitiv data showed. But of the US$715.9 billion spent on acquisitions this year, 41per cent has gone towards either a technology or healthcare transaction. Technology and healthcare have historically the most active M&A sectors. But many companies in this sector have also fared better in the downturn, either because their offerings are accelerating the transition to digital workplaces and big data, or because they are benefiting from increased investment and spending on healthcare.

Some smaller companies in these sectors have also emerged as popular targets for special purpose acquisition companies , which have already spent a record sum to acquire companies to take public this year. The largest SPAC deal ever was July's US$11 billion purchase of healthcare services firm MultiPlan Inc by Churchill Capital Corp III .

 

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