Cross-Border Bulletin: Global M&A Transactions Impacting The U.S.
Global cross-border M&A declined 56% in the second half of 2022, compared to the same period in 2021, echoing the slowdown that began in the first half of the year. The market continues to grapple with elevated inflation, interest rate hikes, intensifying regulatory scrutiny, geopolitical uncertainty and fears of a looming a recession. Each of these factors is hampering global deal activity.
Despite these headwinds, all is not as dour as the data would suggest. If we benchmark performance back to 2019 – not a bad year – the decline does not look as dramatic. The number of global cross-border transactions actually increased 27% in 2022 vs 2019. Several industries continue to attract cross-border investment, including renewables and healthcare tech, both of which we profile in this Bulletin. Additionally, many countries within APAC, including Japan, India, Singapore and South Korea have seen an influx of European and U.S. acquirors seeking M&A opportunities across a variety of industries.
That said, even with several high-profile transactions announced in 2022, (e.g., Evergreen & Brookfield’s $16bn acquisition of Nielsen, Intel’s $5bn acquisition of Tower Semiconductor, etc.) there is no denying the slowdown. The number of cross-border transactions greater than $1bn declined 41% in 2022. Nevertheless, our view remains cautiously optimistic that cross-border activity will resume in 2023. Yes, a recession is likely, but we are hopeful it is relatively quick and that we start to see a rebound in M&A by the end of the second quarter. Private credit continues to help where the public financing markets are not accessible, and we see a pick-up in selected emerging markets that are attracting cross-border investment.
We are pleased to release Volume XI of our Cross-Border Bulletin. This semiannual Solomon Partners report highlights key trends and drivers of global M&A. Themes discussed in this issue include:
- U.S. Funds Ship Private Debt to Europe
- Foreign Acquirors Look to EU for Renewable Energy
- Strategics Hunt for Tech Startups in Israel
- Bright Spots in Asia Amidst a Global Decline in M&A
- Country Focus: Australia
Read the full report below. The Cross-Border Bulletin is authored by Jeff Jacobs, Head of M&A, and Chris Moynihan.