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Laxman Pai, Opalesque Asia: As high-interest rates bore down on companies' mergers and acquisitions (M&A) appetite for a second consecutive year, North American M&A activity remained dismal in 2023, said a study.
According to S&P Global Market Intelligence data, the total value of mergers and acquisitions in the US and Canada fell to $1.222 trillion in 2023, a 15.3% drop from a revised $1.442 trillion in 2022.
The number of transactions in 2023 also dropped 23.7% to 16,695 from a revised 21,871 in 2022, the report said.
As per the study, monthly deal volumes were consistently down from comparable periods in 2022, with December seeing the biggest year-over-year decline of 44.2%. Transaction values, however, showed signs of improvement in the second half of the year. The period saw $666.80 billion of deals, up 20.1% from the first half of the year and 19.2% from the same period in 2022.
Many of the same factors that depressed M&A activity in 2022 carried over into 2023, including tight monetary policy wiping out cheap financing opportunities for M&A. Still, while they were generally smaller than the largest transactions in 2022, several large-scale deals were announced to close out 2023.
Four of the 10 largest North American deals of 2023 were announced in the fourth quarter of 2023, with an uptick in large-scale M&A activity in December signaling the potential for an uptick in the year ahead.
December was the second-strongest month of the year f...................... To view our full article Click here
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