Cross-Border Bulletin: Global M&A Transactions Impacting The U.S.

July 18, 2022

In the first half of 2022, cross-border M&A activity declined 19% compared to last year’s record pace, in-line with the decline in global M&A volumes (down 21% in H1 2022). CEOs, who last year were emboldened by the economic recovery following the COVID-19 pandemic, are now facing numerous challenges including rampant inflation, jarring interest rate hikes, a tight labor market and on-going geopolitical uncertainty. All of these factors, combined with a renewed focus on antitrust scrutiny from U.S. and E.U. regulators, have dampened the outlook for cross-border M&A.

And yet…despite these headwinds, well-capitalized companies continue pursuing cross-border targets. Companies such as Phillip Morris International, with its $17 billion acquisition of Swedish Match and TD Bank, with its $13 billion acquisition of First Horizon, have announced sizeable cross-border transactions.

Market headwinds and uncertainty will continue to pose near-term challenges, but we remain encouraged by several bright spots. Financial sponsors are increasingly active in cross-border M&A, seeking to deploy a near-record $680 billion of capital raised in 2021. In the first half of 2022 alone, 31% of all financial sponsor transactions were cross-border, the highest percentage in the last five years. In addition, small but emerging sub-sectors such as education-technology and music royalties (both discussed in this bulletin) are attracting increased attention and adding to the level of cross-border M&A activity.

We are pleased to release Volume X of our Cross-Border Bulletin. This semiannual Solomon Partners report highlights key trends and drivers impacting global M&A. Themes discussed in this issue include: