According to a report released by Apollo Global Management on the 19th, M&A activity is on track to reach near-record levels this year. In the first nine months of the year, 42 deals exceeded $10 billion, totaling over $1.1 trillion, accounting for 36% of all M&A transactions. AI is the catalyst for this M&A boom, with buyers also pursuing assets in data centers, power generation, grid infrastructure, cooling, and connectivity. Driven by accelerated demand for AI infrastructure and energy security, the utilities and energy sectors saw record M&A activity in the first half of the year. The industrial and healthcare sectors' pursuit of scale further fueled the M&A boom.
Corporate M&A activity is dominated by private equity, while private equity is more reserved, as AI makes valuing software companies more difficult. Private equity deals in the technology sector declined by 67%, while non-technology M&A deals increased by 17%. Overall, private equity-led M&A deals declined by 6%.
The M&A boom in Europe differs from that in the US. The US saw fewer deals, but larger individual deals. Transactions were concentrated in AI, power, and technology. Europe focused on industry consolidation. In the second quarter, financial services led the sector in terms of transaction value, ahead of industry. With policymakers supporting scaling up, banks and telecommunications companies are expanding, and the defense industry is attracting capital that previously avoided it.
