Mergers & Acquisitions (M&A)

Over recent years, we have been direct witnesses to the acceleration of M&A opportunities in the TMT sector, as companies compete with each other to gain new technology capabilities and achieve customer growth. The global pandemic caused by COVID-19 further precipitated the digitalisation already taking place across virtually all industries, including remote working, smart supply chains, and IoT adoption, leading to more industries being targets for TMT-focused M&A.

Within telecoms, the M&A trend acceleration is being driven by the industry’s need to enhance its capabilities to deal with new business models (think subscription-based software models and the burgeoning app economy), compete effectively against OTT providers of content and communications, and provide customers with new technologies, such as 5G and IoT, in a cost-effective way. Other factors include increased spending on cybersecurity and

data protection and a need for advanced data analytics. At the same time, beyond the consolidation push, many companies big and small are reviewing their organisations to divest themselves of non-core assets and refocus their attention into more profitable sectors.

As such, we believe the industry is entering a new consolidation phase and expect to see even more M&A activity in the near future, with companies looking to expand their services, markets and capabilities by acquiring:

• Software-as-a-service innovators
• Digital disruptors (fintech, healthcare, AI, VR)
• Mobile Virtual Network Operators (MVNOs)
• Access to new customer segments
• New platform capabilities (billing, OTA, lifestyle services support)
• New verticals, such as video games and app-based food-delivery services