Global Dealmakers 2022: M&A market update

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When the annual survey regarding cross-border M&A outlook was conducted at the half-year mark in 2021, 71% of respondents believed M&A market would maintain its upward momentum, claiming that the rebound of being experienced from the pandemic could translate to a strong year ahead. Now we can see, that this optimism was well founded.

Despite many disruptions from COVID-19 variants and uncertain economic situation, 2021 was the year for the record books:

• the highest value amount in more than a decade – USD 5.9tn in deals, a 62% lift from 2020
• 34,128 deals in total, 0.4% more than in 2020.

As the global economic recovery continues, many companies are looking to refocus their strategy for the changed market landscape. We can see dealmakers more confident in the way they price in risk. With unprecedented pools of capital they provide tough competition. The market is better braced for temporary, local shocks and we are not seeing recent waves and restrictions as disruptive to dealmaking as in the past cycles.

“In Global Dealmakers 2022, we analyze the condition of the market in 2021 compared to 2020 and address predictions for 2022. What emerges is a picture of a dealmaking market that is growing substantially in volume to its highest level in a decade – USD 5.9 trillion – and overall is looking positively towards the future. From a Polish or regional perspective, due to Russia’s invasion of Ukraine and the ongoing war there, we will of course perceive the near future, and perhaps even beyond, differently. These sad events, as well as other market trends such as inflation, including rising energy prices and thus increasing interest rates, will certainly not be conducive to economic growth around the world. Similarly, the risk level will continue to be elevated due to the risk of the emergence of more dangerous variants of coronavirus.

However, no matter how it sounds, the interviews, surveys and analyses that have been conducted reveal a global market that is looking positively towards the future. This is due to various factors. The most important include:

• post-Covid rebound – businesses want to pursue deals that they were unable to carry out due to the pandemic. Some of them are also looking to expand outside of their home countries – this can be seen in the growing statistics of crossborder M&A;
• ESG – many companies face the need to align their structure or investment portfolio with the expectations of the broader market;
• The conglomerate era is over – numerous players want to exit investment projects that don’t generate adequate growth;
• SPACs / PE – private equity firms have more and more cash at their disposal. New forms of raising funds through listed SPACs, whose task is to make acquisitions, are also part of this trend,” – commented Krzysztof Horodko, Managing Partner, Baker Tilly TPA.

However, nothing is certain. The COVID-19 crisis is not over yet and there are other headwinds too. The need to confront climate change, recent dramatic escalation of tensions in Ukraine and societal issues that it causes will force many countries to introduce restricting market access.

This means big changes for organizations as well. They would have to readjust their strategies to the situation we are in today. Last year’s stellar performance may prove difficult to match, but the appetite for dealmaking remains unchanged.

Please find out more in the full study Global Dealmakers 2022: M&A market update prepared by Baker Tilly experts in collaboration with Mergermarket.