Closings of M&A deals around the world suffered a record decline during the second half of this year as rising interest rates and uncertainty led to a period of sudden slowdown in economic activity frenetic. six months until December 2022.
Data indicated that such deals were down by about $2.2 trillion agreed in the first half of 2022. The report prepared by the British Financial Times indicated that this swing is the largest swing for M&As with a period of six months since it started being counted in 1980.
The total volume of such deals concluded globally in 2022 decreased by 38% compared to 2021, the largest year-over-year decline since 2001. However, it was at high levels by historical standards, higher than the global totals observed in 2016 and 2017.
The slowdown in such deals has been the result of sharp interest rate hikes, in the wake of rising inflation and the war in Ukraine, which have hit confidence in global markets and raised the cost of borrowing.
According to data from Refinitiv, the number of mega deals worth more than $10 billion dropped sharply during the year, with 25 deals signed in the first half and just 11 in the second half of the year. Marc Sorrell, co- head of global mergers and acquisitions, described by Goldman Sachs, 2022 is called a “story of two halves” as a lack of cheap financing stalled the M&A market after the summer season.
“M&A funding is there, but it comes at a much higher cost and isn’t available to all issuers,” Sorrell said.
