The SPAC boom powered the strongest first quarter for dealmaking in 40 years

, Business Insider

The huge boom in blank-check companies powered the best first quarter for mergers and acquisitions since 1980, as investors flush with cash looked for new opportunities along with the reopening of economies after the coronavirus pandemic.

There was $1.3 trillion of global M&A activity in the first quarter of the year, surpassing even the strongest first quarter of the dotcom bubble in 2000, when dealmaking surged to $1.2 trillion.

M&A volumes shot up to $654 billion in the US in the first quarter. That was up 160% compared to the same quarter a year earlier, when dealmaking plunged as the coronavirus pandemic took hold and rocked markets.

Some of the biggest deals came from special-purpose acquisition companies, or SPACs. A record 103 SPAC combinations worth $229 billion were announced in the first quarter.

Among the biggest tie-ups were electric-vehicle company Lucid Motors' deal to go public via Michal Klein's SPAC in a $24 billion deal, and trading app eToro's $10 billion deal with Betsy Cohen's blank-check company.

Some analysts have likened the boom in M&A to the heady days of the 1990s bull market, which later burst in spectacular fashion.

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