Trend Reports and Deal Insights for Analysis of the M&A Market

Published On : 03/06/2023

In the last five years until 2021, the M&A market has thrived remarkably by recording more than an average of 50,000 transactions of global M&A per year. Indeed, 2021 was the best year in the history of the global M&A industry to see a record of over 63,000 mergers and acquisitions worldwide.

With the outstanding progress of the last year, the M&A community, including investors and dealmakers, had high hopes for the year 2022. On the contrary, 2022 turned out to be relatively slower, with only 22,000 global M&A transactions completed as of July.

Unfortunately, Q3 remained unsatisfactory compared to the last year, with only 710 transactions as per the USA record, while the global value of transactions reached 3,562 in Q3.

After 2022’s slow turnout, the M&A community is waiting anxiously to find what’s next in 2023. How are things going to turn out for the M&A industry? Keep reading to find out more about 2022 M&A market trends, technology’s role in mergers and acquisitions, and what the future holds.

Global merger and acquisition trends and what to expect

As mentioned earlier, 2021 was the best year for the global M&A sector, with almost 63,000 transactions and deals over $ 5 trillion in value.

According to experts, 2022 was expected to be slow, but on the contrary, it turned out to be worse than what was predicted. Till July end, only 22,000 transactions took place with a rounded value of $2 trillion.

Looking at the globally growing inflation rate, $2 trillion is technically not a satisfactory number. Q3 wasn’t any better, with only 3500 exceeding global transactions.

What affected the M&A market in 2022?

M&A markets were massively affected by many global happenings and high uncertainty levels that surrounded the global economic system. To mention a few, the war in Ukraine, global inflation, supply chain mismanagement, geo and political instability, regulatory change issues, shortage of labor, and high stock market volatility are responsible for the downfall of the M&A market,

One of the most unfortunate events of 2022 was the $9 trillion wipe-off of the American stock market that panicked investors. Presently the anticipated global recession is already troubling the dealmakers.

Some sectors continued to dominate the market in 2022 as in 2021. These were:

1. TMT (telecommunications, media, and technology) with 30% of all global M&A transactions
2. The real estate sector with 13%, while other industries accounted for 11%

What to expect from the global M&A market?

It won’t be wrong to say that the overall business environment is changing, and so are the deal makers. Many will take their chances and while others will wait for the ripples to settle a bit.

On the other hand, investors and dealmakers are seeing it as an opportunity to buy low and sell high once they survive the recession hit along with other uncertainties. This may boost the confidence of other investors to make bold decisions and make the community optimistic in the coming months.

How has technology improved mergers and acquisitions

In light of recent M&A trends in 2022 and how TMT dominated the M&A market, it is certain that technology is the future. It won’t be wrong to say that technology is the essence of almost every business worldwide. Technologies such as virtual data rooms have made M&A due diligence more efficient and faster, replacing the traditional long and complex process of M&A transactions.

Faster and safer online data sharing

The present use of the data room for M&As by dealmakers or businesses has optimized the sharing and exchange of information. The need for cross-border transactions has created a need for digitally reliable data-sharing platforms. These virtual data rooms act as a centralized platform where buyers and sellers can easily communicate, share, and access data.

Virtual data rooms have unique digital safety features; they ensure 100% safety during data sharing for the sellers. Sellers feel more comfortable knowing that their sensitive information won’t fall into cybercriminals’ hands.

The flow of information can also be controlled through these virtual data rooms through features like document access control, digital watermarks, and customized access. Features like fence-view help protect sensitive data, patents, trademarks, and prototypes.

Better communication throughout the transaction

Virtual data room M&A also have real-time communication tools besides fast and reliable data-sharing solutions. There are multiple communication tools for group conversations and end-to-end encrypted 1:1 interactions. Moreover, VDRs are great for arranging live meetings and Q&A sessions.

Cherry on the top, virtual data rooms make the process of international transactions more cost-efficient. All transactions are digital, cutting down the administrative cost of using paper, printing, traveling, etc.

Final words

After the extraordinary 2021 performance, global M&A markets have experienced a drop in 2022. Factors such as inflation, geopolitical conflicts, uncertain global recession, and many others add fuel to its uncertain future.

Still, the M&A community expects the rise of the M&A market in the near future, with technology becoming the primary driver for it. The use of data rooms will remain similarly popular as in previous years, leading to more facilitated and streamlined M&A transactions.

Jessica Weisman-Pitts

Jesse Pitts has been with the Global Banking & Finance Review since 2016, serving in various capacities, including Graphic Designer, Content Publisher, and Editorial Assistant. As the sole graphic designer for the company, Jesse plays a crucial role in shaping the visual identity of Global Banking & Finance Review. Additionally, Jesse manages the publishing of content across multiple platforms, including Global Banking & Finance Review, Asset Digest, Biz Dispatch, Blockchain Tribune, Business Express, Brands Journal, Companies Digest, Economy Standard, Entrepreneur Tribune, Finance Digest, Fintech Herald, Global Islamic Finance Magazine, International Releases, Online World News, Luxury Adviser, Palmbay Herald, Startup Observer, Technology Dispatch, Trading Herald, and Wealth Tribune.