AI, IoT and data centres key drivers of M&A deals

AI, IoT and data centres key drivers of M&A deals

According to GlobalData, artificial intelligence (AI), the Internet of Things (IoT) and data centres were the key drivers behind mergers and acquisition (M&A) activity over the last two years.

In 2018, the total transaction value of M&A deals announced in the global TMT sector reached $630bn, up 23% from 2017 and significantly ahead of other markets in both 2017 and 2018, according to GlobalData’s Deals Database.

GlobalData’s latest thematic report, Mergers and Acquisitions in Technology Media and Telecoms (TMT), reveals the most notable deals over the last five years, identifies their key thematic drivers, and predicts potential future acquisition targets. 

Cyrus Mewawalla, head of Thematic Research said, “Running any business today requires an understanding of all disruptive threats – and most of these threats come from the technology sector.

“Whatever industry you are in, technology now makes it easier for you to be disrupted. Those lining up to disrupt you are smaller and nimbler, and they don’t compete on a level playing field with you.”

GlobalData’s technology thematic research shows that other disruptive themes include autonomous vehicles, medtech, adtech, internet TV, virtual reality (VR), augmented reality (AR), robotics, cloud computing and geopolitics.

AI, the Internet of Things, robotics, cloud computing and 5G could be described as ‘megathemes’ regarded as likely to have the biggest disruptive impact on organisations.

Mewawalla added, “We are witnessing increasing technology adoption across industries as companies attempt to ride the wave of innovation and digital transformation that is transforming industries from agriculture, to healthcare, motor cars, defence, banking, insurance, construction, and energy.

“At the same time, as Generation Z takes centre stage, demand for personalisation, omni-channel experiences, and predictive customer care is forcing businesses to redefine every aspect of business to target changing consumption patterns and customer expectations.

“These key themes are forcing businesses across industries to review their strategies and business models – and then use M&A to tackle those disruptive themes, not merely to gain competitive advantage, but just to survive.”