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Global M&A transactions drop over 20%, but bright spots remain

The value of global M&A transactions dropped 21% when compared to the record high of H1 2021, although deal values still broke USD2 trillion.

Global deal volume also decreased by 17%, but a drop from last year’s record levels could perhaps be expected, with macro events such as inflation, interest rates and the Ukraine war creating a more challenging deal market. Even so, this first half was higher in value than any year pre-2018, and was the third highest H1 on record. Interestingly, global M&A value was greater in Q2 than Q1, although volume slowed, and this made Q2 2022 the third highest Q2 on record.

The resilience in the market was boosted by a rise in megadeals worth more than USD10 billion, up over 10% in terms of deal value. However it remains to be seen if some of these megadeals might fall through, or take longer to close, due to a trend towards greater regulation in many countries.

Regionally, U.S. deal value was down 28% and volume down 22%, mirroring the global numbers. Most regions suffered a decrease, with MENA the highest with deal value down 49% and deal volume down 22%. Europe only suffered a slight decrease, with deal value down 4% and deal volume down 8%. India was the only major economy to see an increase, benefitting from a jump in deal value of 124% while deal volume climbed 32%.

Real estate was the only sector to see growth in global deal values, recording a 16% lift which resulted in a record H1 despite deal volume dropping 3%. The healthcare sector saw the largest decrease in deal value globally, down 45% and the volume of deals down 31%. TMT dropped 25% for value and 18% for volume, but that still represented the second best H1 on record by both metrics.

Private equity groups continued to do deals, with the global transaction value of private equity-backed M&A up 2% to mark a new record H1 (last year’s H1 was the previous record). While overall deal volume was down, private equity claimed its largest-ever share of overall deal making, accounting for 26% of total M&A so far this year.

Two other private capital asset classes, infrastructure and growth capital, both explored in this edition, also fared well. Infrastructure (including Transport) benefitted from a record H1 by value, and growth capital a record H1 by number of deals.