A. Guttmann
Research Lead covering advertising and marketing
Mergers and acquisitions are recovering from the deceleration in 2020 during the coronavirus pandemic. In 2021, the value of the 63 thousand M&A deals made globally surpassed 5.8 trillion U.S. dollars. Unsurprisingly, the media and technology related sectors are ripe with mergers and acquisitions activity – in 2021 alone, the value of transactions in the technology, media, and telecommunications industry accounted for 31 percent of the global total, reaching 1.8 trillion dollars.
The second largest transaction disclosed that year was Amazon’s purchase of MGM. Having avoided regulatory obstacles from both the FTC and the European Commission, the e-commerce giant agreed to pay 8.5 billion dollars for the ownership of the Hollywood movie studio. In times of streaming wars such a move comes as no surprise, seeing that Amazon will need to invest in video content to stay in the game. This deal is expected to reinforce Prime Video’s library with more than four thousand titles.
An honorary mention also goes to mergers and acquisitions in the gaming industry. This part of the media industry is in flux as well, as gaming and tech companies are on the quest to expand their subscriber base and grow their technology capabilities. In the case of this sector, Microsoft’s purchase of Activision Blizzard for 68.7 billion dollars is not only the biggest deal in gaming so far, but also the largest all-cash acquisition of all time.
Major M&A deals in the media industry
In the pre-pandemic years, when companies were still confident of their future, the M&A deals were often experimental, in the sense that businesses with seemingly unrelated portfolios merged to offer wide ranges of services and products. However, after the COVID-19 outbreak, the media, technology, and telecommunications companies reassessed their needs and began the return to core operations. One of such notable M&A deals in the media sector made that year, and coincidentally the largest, was when AT&T decided to sell WarnerMedia to Discovery for a whopping 43 billion U.S. dollars (the deal has not yet closed as of December 2021). AT&T also parted with DirecTV for 7.1 billion dollars and Crunchyroll for 2.1 billion, thus successfully exiting the media arena.The second largest transaction disclosed that year was Amazon’s purchase of MGM. Having avoided regulatory obstacles from both the FTC and the European Commission, the e-commerce giant agreed to pay 8.5 billion dollars for the ownership of the Hollywood movie studio. In times of streaming wars such a move comes as no surprise, seeing that Amazon will need to invest in video content to stay in the game. This deal is expected to reinforce Prime Video’s library with more than four thousand titles.
An honorary mention also goes to mergers and acquisitions in the gaming industry. This part of the media industry is in flux as well, as gaming and tech companies are on the quest to expand their subscriber base and grow their technology capabilities. In the case of this sector, Microsoft’s purchase of Activision Blizzard for 68.7 billion dollars is not only the biggest deal in gaming so far, but also the largest all-cash acquisition of all time.
Media M&A activity in review
Although data hails from studies with various different methodologies, all sources agree that 2021 saw a significant growth in merger and acquisition activity related to all things media. In general, the number of M&A deals in the media industry worldwide grew by roughly 43 percent compared to 2020. Not only did the volume of transactions rise, but also the value of deals made in 2021 increased by an impressive 267 percent year-on-year. Behind these skyrocketing results were the megadeals – those valued at more than five billion dollars. The media and entertainment industry observed a significant upswing in megadeals in the third quarter of 2020, and continues to see them elevating the total value of transactions ever since. There is no doubt that digital is driving the change. Comparing M&A activity in digital media technologies and traditional media, the push for digital is clear not only in the number of mergers and acquisitions but also in the value of M&A transactions.
