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M&A touches $1trn in Q1 despite market jitters

Matthew Toole
Matthew Toole
Director, Deals Intelligence

Despite a few very large deals slipping through, the first quarter of 2022 will be remembered for how hard the corporate M&A market hit the brakes, how the SPAC market nose-dived, and how, amid the slow-motion backdrop, financial-sponsored M&A took the bend at full-throttle. 

  1. Following monthly declines in Q1, deal makers are considering a ‘pause’.
  2. Private equity buyouts rose by 18 percent when compared with last year and now account for a record 29 percent of all deals.
  3. In the first three months of the year, SPACs slowed by 87 percent, comprising just 3 percent of the total M&A value. .

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In the opening three-months of 2022, worldwide M&A activity pushed past one trillion dollars for the seventh consecutive quarter (since Q2, 2020) despite rising geopolitical tensions that are prompting corporate decision-makers to consider a ‘pause’.

The $1trn tally for January-March is down by more than one-fifth in both value and volume of deals compared with the same period last year and marks the slowest first quarter since 2020.

In addition, the market trajectory through the quarter was deeply negative, with month-on-month declines from January through to March.

A top-heavy, tech-heavy market

The falls were in spite of a remarkably strong showing by the biggest mega-deals of more than $10bn, which leapt 46 percent year-on-year, led way out in front by Microsoft’s $69bn acquisition of online entertainment business Activision Blizzard.

Meanwhile, large and mid-market deals, valued between $1bn and $5bn, suffered a 40 percent decline.

If you currently use Refinitiv Workspace, click here for MSFT Deal Tear Sheet

The technology sector consolidated its lead to reach a record 25 percent of deals globally. Real-estate leapt 86 percent year-on-year, to reach $127bn, its strongest opening quarter since records began in 1980.

Activity was down in all major regions, with the steepest decline in Asia-Pacific, to account for just 17 percent of global activity. The U.S. fell 19 percent to $521bn while Europe dipped 6 percent to $236bn.

Cross-border deals were down by one-quarter, to $329bn. Meanwhile, the value of withdrawn deals in Q1 was 26 percent higher than the same period last year. More than half of withdrawn deals involved Asia-Pacific targets (a proportion that has been steadily falling recent years), while withdrawals from European acquisitions accounted for one-quarter of the market (a proportion that has been steadily growing in recent years).

The rise of ‘general purpose vehicles’ in M&A

One market constituency holding its nerve is the private equity sponsor community, which has ramped up its acquisition-rate by 18 percent compared with the same period last year, to reach $291bn, taking an unprecedented 29 percent share of the overall global M&A market.

Despite a fall in the number of private equity-backed deals, this represents the strongest year-to-date for buyouts since records began in 1980.

This record performance by private equity managers is quite the contrast with SPAC managers, whose acquisition activity in the quarter fell 87 percent to account for just 3 percent of total M&A value.

If you currently use Refinitiv Workspace, click here for the SPAC DEALINTEL page link

In advisory rankings, Goldman Sachs completed a regional hat-trick, taking top spot in the U.S., Europe and Asia-Pacific. Meanwhile, 11 independent advisory firms made the top 25 global financial advisors during the quarter, led by Allen & Co, Lazard and Rothschild.

If you currently use Refinitiv Workspace, click here for the league table link


What is the market trajectory for M&A in 2022 thus far?

Worldwide M&A activity pushed past one trillion dollars for the seventh consecutive quarter, despite rising geopolitical tensions.