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ANALYSIS: With No Q4 Surge, 2022 M&A Activity Limped to a Close

Jan. 6, 2023, 10:00 AM

For the first time since 2018, there was no Q4 boost in M&A activity to round out the end of the year. After a strikingly low deal volume in Q3 2022 ($735 billion), Q4 2022 global M&A deal volume dropped further ($719 billion).

Looking at pending and completed M&A transactions—covering a wide variety of transaction types including minority stake transactions and venture capital financing rounds—2022 had the lowest Q4 global M&A deal volume in the last six years, falling nearly $200 billion short of Q4 2018’s low of $913 billion. And last quarter was the first Q4 since Q4 2018 not to have seen a Q3-to-Q4 increase in volume.

The outcome was slightly better for controlling-stake mergers and acquisitions. Quarterly controlling-stake M&A deal volume did see a modest increase from Q3 2022 ($513 billion) to Q4 2022 ($538 billion), but Q4 2022’s deal volume still remained the lowest Q4 since 2017. And 2022’s annual controlling-stake M&A deal volume was the second-lowest since 2017; only 2020 saw a lower annual total deal volume.

Notably, for the first time since 2017, deal counts for both global M&A transactions and controlling-stake M&A transactions saw a Q3-to-Q4 decrease in 2022. Even 2018, the last year to see a drop in volume from Q3 to Q4, saw an increase in the number of deals announced between the last quarters of the year.

Despite the continued decrease in deal activity, 2022’s total annual global M&A deal volume for all deal types ($3.63 trillion) surpassed the totals from 2017 ($3.44 trillion) and 2020 ($3.42 trillion). For context, the average annual global M&A deal volume from 2017 through 2022 was $3.94 trillion ($3.67 trillion if you exclude 2021 as an outlier), so 2022’s total deal volume fell in line with pre-2021 levels.

While 2022’s numbers don’t seem drastically different than annual deal volumes since 2017, last year’s quarterly numbers—especially the slow finish to the year and the dramatic difference in deal activity seen between H1 and H2 2022—show more variability. Geopolitical and economic uncertainties continue to be at play at the outset of the new year and may continue to affect how deal parties approach potential transactions.

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

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