Dealmaking slumps amid soaring inflation and shocks of war
Global mergers and acquisitions slumped in the first four months of the year as soaring inflation and war in Ukraine rattled dealmakers globally, fresh data has revealed.
Around $1.4tn worth of M&A deals were announced globally during the first four months of 2022, down 21 per cent on 2021 when a post-pandemic deal frenzy saw value hit an all time high, according to figures from deal intelligence firm Refinitiv.
Analysts at financial advisory firm FinnCap told City PM earlier this year that the deal boom was tapering off before war was sparked in Ukraine.
“Even before the invasion, the deals boom had started to show signs of fatigue in Europe, although most bankers did expect 2022 to be pretty busy,” says John Farrugia, managing partner at FinnCap, said.
Analysts at Refinitiv said dealmakers began to show signs of recovery in April however, as the initial turbulence sparked by the war began to settle.
Deals totalling $378.4bn were announced during the month of April 2022, up 23 per cent on March when global markets compared to the previous month but marking a 25 per cent slump on the values notched up in April 2021.
Refinitiv analysts said that technology was the “most active sector by number of deals announced so far” during 2022 and has surged ahead of other sectors by number of deals during each of the last 28 months.