Global M&A Trends: A Wider Slowdown but Still on Track to Surpass Pre-Pandemic Activity

12 December 2022 Foley Ignite Blog
Author(s): Louis Lehot Brandee L. Diamond Eric Chow

We have seen a reduction in M&A activity this year in response to global economic uncertainty.  Everything has slowed down from the fevered pitch of 2021, so it’s not surprising that deal activity has as well.  So, how much of a slowdown are we seeing on a global scale? And will this slowdown continue into 2023?

Pitchbook looked at global M&A activity in Q3, finding that activity fell for a third straight quarter as challenges persist for dealmaking. Their data showed total deal value reaching $1.04 trillion in the third quarter, down 14% from the $1.2 trillion in Q2. They note this total was the lowest since Q4 2020. Data also showed deal volume hitting 10,118 in Q3. This is down about 3.3% from the previous quarter, which saw 10,463 deals. 

Deals in North America were down in Q3, with approximately $487.9 billion in M&A transactions in the quarter. In the report, PitchBook analysts state that they expect M&A activity in North America to remain lower for the upcoming quarters, in part because of tighter monetary policies. 

Europe saw 4,226 M&A transactions in Q3, totaling $414.6 billion. This value remained relatively flat from Q2. One interesting point Pitchbook analysts make is that “European investors are expected to face stronger headwinds in Q4—including a worsening energy crisis and a darkening economic outlook. Yet, a weak euro or pound may lure more US buyers to bargain-hunt in the European market.” 

They also note that despite the wider slowdown, there are some industries that are ramping up.  These include business products and services, aerospace and defense, and supply chain.  The Pitchbook report shows deals in business products and services surging with 2,399 deals in this area for Q3.

Despite this slowdown in activity, global M&A activity is still on pace to surpass pre-pandemic levels. Meaning this is likely more of a correction after the record breaking 2021.  Deals are still getting done and buyers are looking to specific sectors where there is the greatest potential right now.

You can access the full report from Pitchbook here.

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