There are no signs of a resurgence in activity in the global merger and acquisition (M&A) market in 2022. Deal volumes hit $2.3tn between January and July, down by 28% from the $3.2tn of deals announced over the same period last year, according to data from Refinitiv Deals Intelligence.
There were $200.8bn-worth of M&A deals announced in July, down by 62% from July 2021 and the lowest monthly total in 26 months. Contributing to the low volume of deals in July was the withdrawal of 56 deals worth a combined $66.5bn during the month, including billionaire Elon Musk’s $40.2bn planned acquisition of Twitter. Overall, $361.8bn-worth of deals were withdrawn during the first seven months of the year, 6% more than last year over the same period and the highest year-to-date total since 2018.
The hi-tech sector accounted for the biggest share of global M&A activity during the first seven months of the year, with $512bn-worth of deals, accounting for 22% of total deal volumes. Technology M&A is down 31% compared with the same period last year, although technology has been the leading sector by number of deals in each of the past 31 months.
After technology, industrials was the next most active sector with $279bn-worth of deals, followed by energy and power ($277bn), financials ($272bn), real estate ($248bn), healthcare ($187bn) and materials ($147bn). Every sector, apart from real estate, has seen a drop in M&A deals compared with the same period last year.
Private equity-backed M&A transactions reached $22.4bn in July, down 85% from the previous July and the lowest monthly total since April 2020. During the first seven months of the year, $582.7bn of private equity-backed M&A deals has been recorded, down by 17% compared with the same period last year. The largest private equity-backed M&A deal announced in July was UK pharmaceuticals giant GlaxoSmithKline spinning off its consumer health business to Haleon in a deal worth $18.6bn. There was one other private equity-backed M&A deal in July worth in excess of $10bn. The five largest private equity-backed M&A deals in July involved a European target and three were in the energy and power sector.
There were $40.3bn-worth of deals involving a US target in July, down 85% from July 2021 and the lowest monthly total since May 2020. Deals involving a European target reached $90bn, while in Asia-Pacific, this totalled $45.3bn. The US saw the biggest drop in M&A activity during the first seven months of the year, with deal volumes down by 40%. Meanwhile, Europe and Asia-Pacific M&A fell by 5% and 16%, respectively.
