June 6, 2023

Survey: Global M&A Risks and Trends in Q1 2023

Norton Rose Fulbright & MergerMarket recently published “Global M&A Trends and Risks 2023,” which reports the results of a survey 200 of the most senior executives from multinational corporations, PE firms, and investment banks to gauge current M&A risks and trends. Here are some of the key findings:

Private equity ready to put dry powder to work. Most US and Canadian respondents (58%) identify the prevalence of PE dry powder among their top-three drivers of M&A activity in 2023.

Global tech M&A still the gold standard. 63% of respondents place the sector among their top three expected to see the highest growth in inbound-cross border M&A this year

Regulation bites. 60% of respondents see a stricter regulatory environment as a top obstacle to completing M&A deals.

Higher financing costs for dealmakers, and why 78% continue to rely on traditional bank loans despite issues with affordability and availability.

ESG embraced as an opportunity (not an obstacle). Around a quarter of dealmakers now see ESG guidelines, as well as supply chain disruptions, as some of the biggest drivers of M&A.

R&W/W&I on the rise even in industries that insurers previously were reluctant to service, like healthcare and energy.

Despite the headwinds noted in the survey, overall, dealmakers remain an optimistic lot.  The survey says that 51% of respondents overall expect their appetite for M&A to increase somewhat in 2023 (compared to 2022), with a further 5% saying it will increase significantly. Only 17% expect their appetite to decrease.

John Jenkins