The Strategist

Global M&A volume declines by 20% in first half of 2022

07/01/2022 - 03:04

After reaching a record high in 2017, the number of mergers and acquisitions (M&A) completed globally in the first half of the year fell by 20%, to $2 trillion. This is stated by the Financial Times, using information from the research firm Refinitiv.

The Blue Diamond Gallery
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The main causes of the significant fall were excessive stock market volatility, rising interest rates, geopolitical unrest, and inflation. The fall was especially severe in the United States, where the value of M&A dropped by 28% to $ 950 billion. A further negative effect resulted in a more pressure from regional watchdogs in the instance of the United States.

If not for the enormous number of mega-deals, the downturn might have been more significant: in the first half of the year, 25 agreements totaling more than $10 billion were disclosed, which is an increase of 12% from the corresponding time in 2021. Experts are concerned that some of the recently announced mega-deals could fall through or experience significant delays. For instance, Elon Musk has stated numerous times that he would decline to purchase Twitter for $64 billion due to withholding of crucial facts, and the $69 billion merger of IT firms Broadcom and VMware may be postponed due to antitrust inspections.

A record $286.2 billion worth of transactions were canceled overall during this time since the pandemic started. According to some experts, 2022 would be worse than the previous high of 2021, indicating, however, that there is still a lot of interest in mergers.