M&A Is Expected to Pick Up in 2023 as Companies Adapt to Tougher Conditions

Financing challenges disrupted deal making last year, but many companies adjusted in ways that sidestepped market volatility or minimized costs.

Mergers and acquisitions slowed substantially in 2022 as companies faced a mix of financing challenges, including rising interest rates, a pullback in leveraged finance, bond-market jitters and the possibility of a recession.

But many companies adapted, structuring deals to sidestep market volatility and minimize financing costs. In doing so, they provided a glimpse of what’s likely ahead for deal making this year, bankers and advisers said. 

“The M&A market is not going to stop. It just doesn’t work that way. What it does is it evolves,” said Christopher Auld, head of leveraged finance at investment firm Stifel Financial Corp.