Global M&A Trends: What You Need to Know

The COVID-19 pandemic brought mergers and acquisitions across the globe to a screeching halt. But the effects were not evenly distributed. In some regions, M&A quickly bounced back, while in others it continues to struggle. By 2021, though, the global M&A market was strongly bouncing back, breaking records and producing an increase in deal volume by 24% over 2020 deals. Public deal values reached an all-time high of $5.1 trillion. This includes more than 100 megadeals, with a deal value in excess of $5 billion. This frenetic pace of deal-making focused strongly on the surge in the tech sector and data-driven assets. The pandemic neatly demonstrated the case for digital solutions, and these deals will likely continue to grow in the coming years. So what trends are we seeing in the global M&A market? 

As a starting point, it is unlikely that 2022 deal value and volume will exceed 2021’s record. The combination of pent-up deal making and a strong case for technology led to a unique year. But we do see strong indications that another big year is on the horizon. The deal pipeline remains strong, along with high economic optimism. Companies across the globe continue to need quality tech. Lower interest rates, low operating costs, and lower regulation have also driven growth in numerous companies. Now, though, each of these factors is facing unprecedented pressure. We’re now seeing rising inflation, higher interest rates and taxes, and more regulation. This new volatility means new deal delays and uncertainty. 

In spite of these challenges, dealmakers continue to be eager to enter the world of M&A. In PwC’s annual CEO survey, published for the 25th time in January, 77% of CEOs reported that they thought global economic growth would improve in the coming year. More than half reported high confidence in their prospects for revenue growth, with 67% of PE CEOs and 64% of tech CEOs reporting strong prospects. 

The pandemic showed us that there is no way to predict every potential economic factor that could shift the economy or dealmaking. But the current outlook remains strong. And because of uncertainty about the future, now remains the safest time to make a deal, particularly if inflation accelerates and multiples decrease.