The total value of global merger-and-acquisition (M&A) announcements dropped by 26.7% to $2.27 trillion in 2023, according to S&P. The decrease can be attributed to higher interest rates, which have dampened dealmaking. The number of announced company tie-ups also saw a decline of 21.4%.
The year 2023 marked the weakest period for M&A since at least 2019, even including the pandemic year of 2020, which saw a total dollar volume of $2.94 trillion, compared to the $2.27 trillion recorded in 2023.
However, amidst the pessimism surrounding M&A activity in 2023, two significant deals were announced in the fourth quarter. Exxon Mobil Corp. revealed its plan to acquire Pioneer Natural Resources for $59.5 billion, making it the largest M&A announcement of the year. Chevron Corp.’s agreement to acquire Hess Corp. for $53 billion was also announced during the same period.
Some level of optimism was restored with these mega-deals towards the end of the year. Joe Mantone, an analyst at S&P Global Market Intelligence, acknowledges that challenges persist, including geopolitical unrest and concerns about a potential recession, which continue to influence dealmakers and executives.
S&P’s data for the fourth quarter highlights that the three-month period marked the eighth consecutive quarter with total stock equity issuance below $100 billion. This figure falls short of the average quarterly volume of $232.4 billion seen from 2020 to 2021.
While equity issuance remains sluggish, there are positive signs emerging in the IPO market for 2024. Three companies—American Healthcare REIT, Fortegra, and Fractyle Health—have recently released estimated price ranges for their IPOs, indicating a thaw in the market.
Also read: American Healthcare REIT, Fortegra and Fractyle Health set IPO price ranges as thaw continues
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