In an impressive turnaround, global mergers and acquisitions (M&A) have experienced a remarkable rebound, surging by 28% quarter-on-quarter (QoQ) from $469 billion in Q1 2023 to a staggering $602 billion in Q2 2023. The resurgence in deal-making activities comes after four consecutive quarters of decline and has been largely propelled by the growing emphasis on environmental, social, and governance (ESG) themes, as highlighted by GlobalData, a prominent data and analytics company.
According to GlobalData's recent report, titled "Mergers and Acquisitions Deals by Top Themes and Industries in Q2 2023 – Thematic Intelligence," mega-deals valued at $1 billion or more also witnessed a substantial 46% QoQ increase, soaring from 85 deals to 124 during the same period.
Priya Toppo, a Thematic Intelligence Analyst at GlobalData, remarks that North America spearheaded the M&A deal activity in Q2 2023, accounting for a total of 3,185 deals worth $291 billion, making it the most active region.
However, the APAC region, excluding China, and China itself experienced a downward trend in M&A deal activity on both a year-on-year and quarter-on-quarter basis. This indicates a sense of caution among investors towards these regions.
ESG emerged as the dominant theme driving M&A activity during Q2 2023, with a noteworthy 104 deals amounting to $145 billion.
Toppo elaborates, "The focus on ESG themes reflects a growing awareness among corporations about the impact of their actions on society and the environment. Investors are increasingly drawn to companies that prioritize ESG principles."
As businesses strive to align themselves with societal and environmental objectives, it predicts that the ESG theme will likely continue to drive M&A strategies in the foreseeable future.
Looking ahead, Toppo notes, "Despite the recovery in global M&A activity in Q2 2023, the outlook for H2 2023 remains relatively sluggish, with potential further increases in interest rates and the prospect of mild recessions in several key markets. However, the M&A market is expected to rebound as we approach 2024, as acquisitions continue to play a pivotal role in corporate strategies."
The information in this report is based on GlobalData's comprehensive analysis, covering deals reported across all regions. The deal values are included wherever disclosed, and the report encompasses various deal types, such as mergers, acquisitions, asset transactions, and private equity buyouts. The timeframe for this analysis spans from January 1, 2019, to June 30, 2023, encompassing all deals announced during this period.
