M&A, private equity, and venture financing deals all experience year-on-year decline
The first half of 2023 saw a significant decline in global deal activity, with a total of 28,151 deals (including mergers & acquisitions (M&A), private equity, and venture financing deals) announced, marking a 23.7 per cent decrease compared to the 36,873 deals announced during the same period in 2022, according to leading data and analytics company GlobalData.
An analysis of GlobalData’s Financial Deals Database reveals that all deal types experienced a year-on-year decline during H1 2023. The number of M&A deals declined by 17.4 per cent, while deal volume for private equity and venture financing deals registered declines of 23.5 per cent and 31.2 per cent, respectively.
Aurojyoti Bose, Lead Analyst at GlobalData, points to a challenging year for deal activity in 2023, influenced by factors such as rising interest rates, high inflation, fears of recession, and geopolitical tensions. These circumstances have collectively contributed to a significant decline in deal activity during the first half of the year.
The decline in global deal activity reflects the cautious approach of businesses and investors in the face of economic uncertainties. Rising interest rates and high inflation rates have increased borrowing costs and created an environment of uncertainty, leading to a slowdown in deal-making. Additionally, fears of a potential recession and geopolitical tensions have further dampened investor confidence and resulted in a more cautious investment landscape.
While the decline in deal activity during H1 2023 is concerning, the situation highlights the need for businesses and investors to carefully evaluate opportunities in the current economic climate. As economic conditions evolve and stabilize, deal activity is expected to rebound, driven by renewed confidence and a more favorable investment environment.
GlobalData will continue to monitor the global deal landscape and provide insights into emerging trends and opportunities as the year progresses, enabling businesses and investors to make informed decisions in an ever-changing economic landscape.