M&A volume fell by 54% in the third quarter
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In the third quarter, the volume of mergers and acquisitions around the world decreased by 54%, amounting to $716.6 billion. Reuters with reference to the data of the analytical company Dealogic. Thus, the quarter was the third in a row, when the activity in the M&A market declined, and this decline accelerated. For comparison: in the second quarter, the volume of transactions fell by 25.5%, to $1 trillion. In total, since the beginning of the year, the volume of M&A has decreased by 33%, amounting to just under $3 trillion.
The sharp decline in M&A is due to a number of reasons. Activity in this market continues to be negatively affected by geopolitical and economic uncertainty. The ongoing growth of key rates by the Fed and central banks of different countries also has an impact. As a result, many companies are moving away from deals that have been previously negotiated and are much more cautious about new deals.
The volume of transactions fell especially strongly in the United States – by 63%, to $ 255.9 billion. In the Asia-Pacific region, the decrease was 52%, and in Europe – by 42%. At the same time, several large transactions were made during the quarter. Among them – purchase developer of Adobe software for designer service Figma for $20 billion, the acquisition by investment funds Oak Street and GIC of their competitor REIT Store Capital for $14 billion, and also deal energy equipment maker Schneider to acquire software developer Aveva for £9.5bn ($10.5bn).
According to Melissa Sawyer, director of M&A at Sullivan & Cromwell, the M&A situation “hasn’t bottomed out” yet. “Closing a deal takes a lot longer. The focus is now exclusively on high-quality assets, especially in sustainable industries such as infrastructure,” said Guillermo Baigual, head of M&A in the Europe, Middle East and Africa region at JPMorgan.
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