M&A ETFs Sizzling On Recent Deal Activities

After tumbling to the lowest level in more than a decade in the second quarter, global M&A activity gathered steam in September. This is especially true following the flurry of latest deal activities.

The largest deal is Nvidia’s (NVDA - Free Report) buyout of UK-based chip designer Arm Ltd. from Japan's SoftBank Group Corp. for as much as $40 billion after weeks of speculation. It will represent the biggest acquisition in the history of the semiconductor industry.

Other notable deals include Gilead Sciences’ (GILD - Free Report) purchase of cancer treatments’ specialist Immunomedics (IMMU - Free Report) for $21 billion. The deal, if approved, would be Gilead’s largest acquisition ever. Meanwhile, Verizon Communications (VZ - Free Report) agreed to acquire prepaid wireless service provider TracFone from America Movil (AMX - Free Report) for as much as $6.9 billion. The move comes as the largest U.S. wireless carrier seeks to expand its mobile business into the so-called prepaid market.

Further, Oracle ORCL won the bid for the U.S. operations of TikTok, the popular mobile video app owned by Chinese company ByteDance, in a fight with Microsoft MSFT. While the terms of the deal have not been disclosed, it looks more like a corporate restructuring than an outright sale as proposed by Microsoft. Chinese e-commerce giant Alibaba Group BABA is also in talks to invest as much as $3 billion in the Southeast Asian ride-hailing firm Grab Holdings Inc., per the sources.

With the recent surge in deal-making, global M&A volumes have approached $1.97 trillion so far this year, exceeding $1.26 trillion in 2009 and $1.6 trillion in 2010 during the same period after the 2008 financial crisis, according to Refinitiv data. Technology makes up almost a fifth of the total mammoth deals. The boost came from the digitalization push triggered by the pandemic. The acceleration in the global digital shift for everything ranging from remote working to entertainment and shopping has compelled companies to race changing consumer habits in order to gain market share. This move in turn is leading to consolidation across various sectors of the market.

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