Global merger and acquisition (M&A) deal value fell to a five-year low in 2023.

Total deals in 2023 totalled $2,223bn, a drop of 12% compared to the previous year.

In terms of deal volume, there was a 17% fall from 37,186 deals in 2022 to 30,883 M&A deals in 2023, according to GlobalData.

Deal activity was impacted by several factors. These include high inflation and the increases in interest rates across all major economies, which in turn raised concerns over an economic slowdown in the global economy.

  • The energy sector dominated M&A deal activity by value – The energy sector—which includes oil & gas and power & utilities—had the highest M&A deal value in 2023 with 3,559 deals worth $704bn. The energy sector also accounted for three out of the top 10 global M&A deals in 2023, driven by the key theme of shale. It was followed by the tech, media, & telecom (TMT) sector and basic materials sector (including construction, mining, chemicals, agriculture, and forestry), with a deal value of $544bn and a deal value of $459bn, respectively.
  • Billion-dollar deals saw a severe fall – The number of mega deals, deals where the transaction value is greater than or equal to $1bn dipped to the lowest since 2019, just 432 in 2023 compared to 816 in 2021.
  • ESG was the most prominent theme in terms of deal volume – In 2023, the ESG (Environmental, Social, and Governance) theme drove 49 M&A deals out of the top 500 M&A deals in 2023 by deal value. Other noteworthy themes included supply chain disruption, energy transition, shale, financial wellness, and fintech.
  • North America recorded the highest M&A deal activity – North America continued to dominate M&A deal activity with 12,416 deals worth $1,150bn recorded in 2023. Meanwhile, all regions saw a drop in deal value in 2023 compared to the previous year, except for the China region.

Notable deals in 2023

Despite the overall decline in deal activity, 2023 saw some interesting deals such as ExxonMobil’s $65bn acquisition of Pioneer Natural Resources, a producer of low-cost and low-carbon-intensity oil and natural gas, and Chevron’s acquisition of Hess, an energy company engaged in the exploration and production of crude oil and natural gas for $60bn.

Other prominent deals included Pfizer’s $43bn acquisition of Seagen, a biotechnology company focused on developing and commercializing innovative monoclonal antibody-based therapies for the treatment of cancer, and Borouge, an Abu Dhabi-based petrochemicals company and a manufacturer of polyolefin solutions merger with Borealis, provider of polyolefins, base chemicals, and fertilizers for $32bn.

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By GlobalData

M&A 2024 outlook

The outlook for M&A 2024 remains subdued, with further increases in interest rates and the risk of mild recessions in several key markets.

Mega deals will continue to face hurdles, especially in the US where antitrust concerns have been a focus of regulators. As businesses navigate the rapidly changing global landscape, integrating ESG principles into M&A strategies has become a necessity for long-term success.

However, the M&A market will rebound throughout 2024 as interest rates fall and acquisitions remain a key element of corporate strategy.