Merger and acquisition activity in the media and telecom sector continued to pick up steam as the pandemic waned in the first half of 2021, according to a new report from PwC.
There were 410 deals announced in the six months preceding May 15th, worth $83 billion, according to PwC, up from 61 deals in the second half of 2020 and just 32 in the first half of 2020. The value of the deal is the highest PwC said it has seen in years.
“Deal volumes continue to be driven by the internet and information, advertising and marketing and telecommunications subsectors,” the report said. “Private equity deals reached a new high in terms of both deal volumes and value, accounting for 43% and 66%, respectively.”
Among the big deals so far this years was AT&T’s decision to get out of the media business by spinning off WarnerMedia and merging it with Discovery.
“This announcement was the biggest sign yet that telecom giants were reversing course on their plans to expand into the media space,” PwC said. “It followed on the heels of Verizon’s disposal of HuffPost and Yahoo/AOL, T-Mobile’s discontinuation of its TVision streaming service and AT&T’s own spinoff of DirecTV into a joint venture with TPG Capital.”
At the same time, the streaming wars have media companies bulking up on content, The combination of WarnerMedia and Discovery is one example. Another is Amazon’s purchase of MGM Studios for $8.45 billion.
“Players in the media and telecom sector are starting to feel the stress brought on by the enormous capital requirements needed to compete and maintain relevance during this period of transformation, leading to a wave of asset reallocation,” said Bart Spiegel, media and telecom deals partner at PwC.
