The second quarter of 2023 saw a recovery in the global M&A market with total deals hitting $602bn, a rise of 28% compared to the $469bn deal value recorded in Q1 2023.
In terms of deal volume, there was a 3% fall from 8,275 deals in Q1 2023 to 8,001 M&A deals in Q2 2023.
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The recovery in deal value appeared against a backdrop of positive economic sentiment, even as inflation rates remained elevated, and many central banks raised interest rates.
Key M&A takeaways
Below are the key trends that were observed in Q2 2023:
- Billion-dollar deals saw a rise – Q2 2023 saw a rebound in the number of mega deals—those deals where the transaction value is greater than or equal to $1bn. In Q2 2023, there were 124 mega deals, a rise of 46% compared to Q1 2023.
- The basic materials sector dominates M&A deal activity by value – The basic materials sector—which includes construction, mining, chemicals, agriculture, and forestry—had the highest M&A deal value in Q2 2023 with 1,611 deals worth $212bn. The basic materials sector also accounted for three out of the top ten global M&A deals in Q2 2023, driven by key themes including ESG-Environmental and energy transition. The basic materials sector was followed by energy (including oil & gas and power) and tech, media, & telecom (TMT), with 1,072 deals with a deal value of $189bn and 2,357 deals with a deal value of $154bn, respectively.
- North America recorded the highest M&A deal activity – North America continued to dominate M&A deal activity with 3,185 deals worth $291bn in Q2 2023. Meanwhile, the China and APAC excluding China regions saw a drop in deal value in Q2 2023 compared to the previous quarter.
Notable deals in Q2 2023
Q2 saw some interesting deals, such as Oneok’s $19bn acquisition of Magellan Midstream Partners, a midstream energy company that primarily transports, stores, and distributes refined petroleum products. Another was the Vodafone UK merger with Hutchison 3G, a British telecommunications and internet service provider, for $19bn.
Other prominent deals included Bunge acquiring Viterra, an agricultural company that distributes grains, oilseeds, pulses, sugar, cotton, and edible oils for a deal value of $18bn, and Glencore’s $17bn acquisition of Teck Resources, a diversified resource company, which engages in mining and development of mineral properties.
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By GlobalDataQ2 2023 was a significant turning point in the global M&A market, with the rise of environmental, social, and governance (ESG) themes driving global M&A activity in the quarter with 104 deals and a deal value of $145bn. The outlook for M&A H2 2023 remains subdued, with further increases in interest rates and the prospect of mild recessions in several key markets. 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 as we head into 2024 as acquisitions remain a key element of corporate strategy.
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