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Mergers and acquisitions made a resurgence in July, with mega mergers moving ahead in industries spanning telecom, oil & gas and semiconductors.

Like many other human activities, M&A activity ground nearly to a halt during the pandemic. The second quarter saw only about $500 billion in deals announced, versus more than $1 trillion the year before, according to data firm Refinitiv. Mega-deals topping $5 billion were especially scarce. Amidst the uncertainty, firms were reluctant to part with liquid assets and less confident about the prospects of their targets. Planned deals, such as Xerox’s bid to take over HP, were put on hold.

There were some notable exceptions, however. Last year was a big one for telecom mergers and acquisitions, and that momentum continued despite the coronavirus, with telecom industry M&A remaining active in 2020. In April the long-awaited merger of America’s third- and fourth-largest wireless carriers, T-Mobile and Sprint, finally closed. After releasing second-quarter results this month, T-Mobile said it has overtaken AT&T as the country’s second-largest wireless provider.

As quarantined consumers drove up demand for food delivery, the timing was right for American food delivery firm Grubhub and its European counterpart Just Eat to join forces. They struck a deal in June, after a frustrated Grubhub walked away from prolonged merger negotiations with Uber.

The real turnaround in mergers and acquisitions came in mid-July, when pent-up demand prompted a wave of mergers and acquisitions across sectors. This has included mega-mergers. On July 13 American multinational semiconductor company Analog Devices said it would acquire Maxim Integrated, which specializes in integrated circuits, for $21 billion. The deal significantly strengthens Analog’s position, and could signal more consolidation in the semiconductor industry.

On July 20 oil & gas supermajor Chevron announced it will acquire smaller oil & gas firm Noble Energy for $13 billion. The following day the world’s largest online classified ad group was created when Norway’s Adevinta acquired eBay Classifieds Group, a unit of American ecommerce pioneer eBay, in a deal worth $9.2 billion.

It is certainly possible that renewed outbreaks of COVID-19 could slow M&A activity down again. Widening protectionism also poses an obstacle. But The Economist reports that for the moment, M&A bankers remain optimistic, particularly regarding companies that have managed to keep their profits up. Eamon Brabazon of Bank of America says these firms will likely return to making deals, and lenders are ready to back takeover bids from strong contenders. If economies remain uncertain, those in a position to acquire could be tempted to pounce on vulnerable targets.

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