Global M&A drops to 10-year low

Global deal making dropped to a 10-year low in 2023, with mergers and acquisitions (M&A) activity falling by 17% year over year, according to data from LSEG Data & Analytics.

While M&A activity picked up in the fourth quarter, rising 23% from the previous quarter, the full year finished at its weakest level since 2013, coming in at US$2.89 trillion, the firm reported.

There were more than 55,200 M&A transactions worldwide in 2023, which represented a decline of 6% from 2022.

Most of the drop in the value of deal making was driven by weaker prices.

LSEG reported that there were 32 deals valued at over US$10 billion during the year, totalling US$646.6 billion, which was down by 13% from the previous year for these so-called mega deals.

Smaller deals — valued at less than US$500 million — were down by 26% year over year, totalling US$792.8 billion, it noted.

The firm also said the value of private equity–backed buyouts dropped by 30% in 2023 to its lowest level since 2019 at US$566.0 billion — representing about 20% of global deal activity, down from 23% in 2022.

By region, European M&A was down by 28% last year, and deals in the Asia Pacific region fell 26%. U.S. M&A was down only 5% year over year, LSEG reported.

The energy and power sector led the way in global M&A, with US$502.3-billion worth of deals during the year, up 11% from 2022. The sector accounted for 17% of global deal activity, outpacing the industrials, technology and health-care sectors, which each represented 13% of overall M&A.

The top three firms in global M&A advice remained unchanged, as Goldman Sachs led the way with a 29.7% market share, followed by Morgan Stanley (23.3%) and JP Morgan (22.0%).

Citi edged out BofA Securities to round out the global top five.

RBC Capital Markets was the top ranked Canadian firm, taking 12th place overall, up from 15th spot in 2022.

BMO Capital Markets was the only other Canadian firm in the global top 25: it was ranked 19th in global M&A, jumping sharply from 43rd place in the previous year.