Bloomberg Law
Oct. 7, 2022, 9:00 AM

ANALYSIS: All M&A Market Segments Saw Q3 Drop in Deal Volume

Emily Rouleau
Emily Rouleau
Legal Analyst

Last quarter’s mergers and acquisitions market results illustrate that heightened uncertainty continues to hinder M&A activity. Q3 saw a notable dip in global M&A volume compared to recent quarters, and no market segment was immune to the fall.

The degree to which Q3 2022 deal activity is down is striking. Last quarter had the second-lowest total deal volume ($504 billion) for controlling-stake transactions of any quarter from Jan. 1, 2017 to Sept. 30, 2022. Only Q2 2020—when the reality of the Covid-19 pandemic started to truly hit—had a lower quarterly deal volume ($225 billion). And Q3 2022 had the lowest total deal volume among all other Q3s since 2017.

When broken down by market segment, Q3 2022 ranked in the bottom-five quarterly deal volumes for small deals (total value of less than $100 million), middle market deals (total value of $100 million to <$1 billion), and large deals (total value of $1 billion to <$10 billion). Q3 2022 also had the lowest volume ($50 billion) and lowest count (three deals) of mega deals—deals with a total value of $10 billion or more—since Q2 2020, which saw zero mega-deal activity.

Q3 deal volume for each market segment was below the average for each segment since 2017. Furthermore, the differences between the average quarterly volumes and Q3’s deal volumes for large and mega deals are more dramatic than the differences for small and middle market deals.

Large deals averaged $314 billion in volume per quarter, but Q3’s large deal volume ($242 billion) is 23% below average. And Q3’s mega deal volume ($50 billion) represents a 72% plummet from the average volume per quarter ($179 billion).

In contrast, small deals averaged $53 billion in volume per quarter, and Q3’s $46 billion volume is 13% below average. Similarly, middle market deals averaged $202 billion in quarterly volume, and Q3’s $166 billion volume represents an 18% decrease.

M&A activity typically increases in Q4 as companies seek to close transactions before the end of the year, but Q3’s performance and the decreases in all market segments suggest that Q4 2022’s activity could fall short of recent years’ Q4 deal volumes.

Bloomberg Law subscribers can find related content on our M&A Deal Analytics resource.

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