How did mergers and acquisitions activity in 2022 stack up against prior years? What key trends have been driving dealmaking? How will they influence M&A activity in 2023?
I think of 2022 as two halves. The first half was in line with the pre-pandemic levels, while the second two quarters were materially down. I expect 2023 to be overall flat with reverse trends. The first half of 2023 will be like the second half of 2022, and the second half of 2023 will be like the first half of 2022.
Anu Aiyengar
Global Co-Head of M&A
Undoubtedly, there’s a transition period as people get used to higher interest rates and reduced capital availability, but the debt and equity markets are coming back. So, we are cautiously optimistic on 2023 and we expect deals to come back reasonably strongly through the year.
Dwayne Lysaght
Co-Head of EMEA M&A
Cross-border volumes, from its heyday of 2015 and 2016, have come down quite a bit. With the strength of the dollar and the relative stability of the U.S., I expect that the U.S. outbound to parts of Europe and some strong European companies looking again at the U.S. should come back.
Anu Aiyengar
Global Co-Head of M&A
In terms of opportunities in EMEA, we expect the U.K. to be the leading M&A generator in 2023, while big economies like France and Germany will not be far behind.
Dwayne Lysaght
Co-Head of EMEA M&A
It has been a barbell — some sponsors are willing to over equitize, while some are 'risk off' and will wait for both clarity of outlook and leverage finance markets to come back. They're looking for more clarity on the future and where growth, inflation, interest rates and unemployment will land.
Anu Aiyengar
Global Co-Head of M&A
Given rotation of assets, consolidation drivers and general fragmentation, we expect Diversified Industries to be one of the busier sectors in EMEA. There’s a lot of activity in energy transition, which will drive deals across both Energy, Power, Renewables, Metals and Mining and Diversified Industries.
Dwayne Lysaght
Co-Head of EMEA M&A
The proactive buyers are willing to take a bit of risk. They are actively engaging with sellers, and when the seller’s mindset changes, the deals are happening. Buyers should not be too greedy and try to catch the absolute bottom. Some of the best deals for these buyers will get done over the next six months.
Anu Aiyengar
Global Co-Head of M&A
Activism as an asset class has really matured, so now you can no longer say every activist wants the same thing. There are some who are opposing a transaction, and there are some who support dealmaking, corporate clarity, CEO shakeups, and share buybacks or not. Industrials, consumer and tech sectors account for 50% of these targets.
Anu Aiyengar
Global Co-Head of M&A
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