Perspective 1: Strong M&A activity in 2022 still expected
2021 was a record year for M&A activity across the globe, $5.9 trillion of announced global volumes.
We expect M&A activity in 2022 to be driven by some of the same underlying forces that we saw in 2021.
While market participants are taking stock of the current geopolitical climate to evaluate their approach to M&A in the near-term, we expect activity to continue apace.
In some instances, our view is that activity is likely to shift away from strategic-only combinations to “self-help” transactions, and sponsor-led transactions.
Perspective 2: CEO confidence, tech disruption and constructive capital markets to drive activity
Several factors underlie our view that M&A activity in 2022 too will be robust.
CEO and boards continue to exhibit confidence in their underlying business, their earnings and their strategic prospects.
Technological disruption and innovation will also drive M&A activity, as it has in the past few years.
We also believe that the credit markets, equity markets and monetary policy will continue to be constructive.
Technology, Industrials and Healthcare are the sectors that are likely to lead the way in terms of transaction volume, as they have for the last several years.
Perspective 3: Financial sponsors likely to increase share of global M&A activity
In 2021, financial sponsors accounted for 29% of the global announced M&A volume.
We believe financial sponsors’ share of the M&A market in 2022 is likely to grow from 2021. This is supported by $2 trillion in dry powder, supportive credit markets, a regulatory environment that generally favors them, and their ability to provide solutions to very complicated problems.
2022 should be a very active year for M&A, and we look forward to advising our clients, helping them achieve their strategic goals.
