By Michael J. de la Merced | New York Times
Heading into 2022, Wall Street’s deal-makers thought it would be hard to maintain last year’s record-breaking pace for mergers and acquisitions. Still, few thought their businesses would fall by too much.
But the M.&A. business hit turbulence in the middle of the year and hasn’t recovered.
Activity held up compared with historical trends, with about 53,863 deals worth $3.6 trillion announced in 2022, according to Refinitiv, but dropped sharply in the second half of the year. And while the yearly total pales in comparison with 2021’s $5.7 trillion worth of transactions, it’s in line with the value and number of takeovers announced in the previous six years.
“I would sum it up as significantly less activity than in 2021,” said Marco Caggiano, the head of North American M.&A. at JPMorgan Chase. “But because 2021 was historically at such a high level, 2022 looks like a more normalized level of volume.”
Perhaps the bigger question is how things look for next year. Bankers, lawyers and private equity executives suggest that, for all the challenges they faced this year, there are reasons to be optimistic about 2023.
“The bidding war seems to have ended. Buyers are now pushing and asking for stricter indemnity provisions and larger holdbacks.”
Shruti Gurudanti, Rose Law Group partner and director of corporate transactions
