Facing unprecedented industry transformation and emerging competitive threats, many telecommunications companies are turning to mergers and acquisitions to add new capabilities and evolve their businesses for the next era. We’re tracking telecom M&A activity around the world, and each quarter, we’ll publish the latest developments in this dashboard.
Here are some of the key takeaways from the most recent quarters’ deals:
- The deal-making recovery that began last year has gained momentum in 2021. The telecom industry generated $80 billion in deal value in the first half of the year, a 65% increase compared with the same period last year (see panel 1 above). Most of the deal value continues to come from the Americas and Europe, the Middle East, and Africa, although Asia-Pacific’s share of total deal value increased by 10 percentage points year over year.
- Looking at deal types, fiber joint ventures and divestments of towers and other telecom infrastructure, such as data centers, continued their strong run of the past five years as valuations remained high. In addition, both in-country scale and scope deals notched big year-over-year gains in the first half of 2021 (see panel 2). Meanwhile, full assets divestments and geographic expansion transactions have slowed down this year.
- In-country M&A now accounts for nearly 60% of total deal value since 2016, while infrastructure divestments make up 21% of deal value during that period (see panel 3). The former is a result of the superior synergies of such transactions (market consolidation deals in particular), while the latter reflects the fact that valuation multiples for infrastructure assets are more than triple the valuations of telcos.