According to GlobalData, Q3 2022 saw M&A deal value fall to a two-year low. It dropped 40% compared to Q2 2022, and 48% compared to Q3 2021. In Q3 2022, the global markets recorded 8,258 M&A deals worth $544 billion, compared to the 9,238 deals worth $902 billion recorded in Q2 2022.

This drop in M&A deals can be attributed to climbing inflation, rising interest rates, tumbling tech, and a weaker Euro.

TMT continued to dominate M&A deal activity

The technology, media, and telecom (TMT) sector continued to dominate, with 2,467 deals worth $161 billion recorded in Q3 2022. But the deal value for the TMT sector dropped by 50% compared to Q3 2021, and deal volume dropped by 22%. TMT accounted for eight out of the top 20 global M&A deals in Q3 2022. Followed by the construction and banking & payments sectors, with 845 deals having a deal value worth $62.6 billion and 740 deals having a deal value of $50.3 billion, respectively, in Q3 2022. Most sectors saw a decline in deal activity in Q3 2022. Except for consumer goods and packaging all 16 sectors saw a decline in deal value in this quarter.

North America recorded the highest M&A deal activity

Even though North America saw a 43% drop in deal value in Q3 2022 compared to Q2 2022,  it still managed to record the highest deal activity this quarter. It saw 3,340 deals worth $227 billion in Q3 2022. North America, Europe, and APAC Ex-China all recorded a decline in deal value in Q3 2022 compared to the previous quarter.

Billion-dollar deals saw a severe fall in deal number

A downward trend in mega deals was seen. These were the deals where the transaction value was greater than or equal to $1 billion, and just 115 such deals were recorded in Q3 2022 compared to 136 in Q2 2022. Deals valued between $100 million and $1 billion also saw a fall in Q3 2022, with 482 deals compared to Q2 2022’s 593 deals.

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Notable deals in Q3 2022

Despite the fall, Q3 2022 saw some interesting deals like Adobe’s $20 billion acquisition of Figma, a cloud-based design tool firm, and Kuwait Finance House’s acquisition of Ahli United Bank, a regional bank based in Bahrain for $11.6 billion. These deals were followed by DigitalBridge Group and Brookfield Asset Management acquiring a 51% stake in GD Towers, Germany’s largest tower company for $10.8 billion, and Vista Equity Partners’ $8.4 billion acquisition of Avalara, cloud-based tax compliance automation solutions.

Big data was the major theme driving Q3 2022

Most mega deals were driven by big data, including deals like CVS Health’s acquisition of Signify Health, a healthcare platform for $8 billion, and Amazon’s $3.9 billion acquisition of 1Life Healthcare (One Medical), a membership-based primary care service. The medical devices sector saw many deals driven by big data. Apart from this, themes like cloud, cybersecurity, and collaboration tools also drove M&A deals in Q3 2022. M&A deal activity is likely to continue with this trend into Q4 2022 as we expect the market to experience a global recession next year.