There is No Crystal Ball: U.S. M&A Trends and Prediction
When there is unpredictability in the air, risk allocation is the name of the game when it comes to negotiating M&A transactions. While the market for M&A has been record-breaking on most accounts in recent years, geopolitical turmoil, increased inflation, the stock market turning bearish, and rising regulatory enforcement all contribute to an atmosphere of growing uncertainty. A landscape of uncertainty does not mean that buyers’ appetite for strategic acquisitions will dry up entirely, but rather that buyers will look for techniques to employ to allocate risk and increase their scrutiny of target companies.
The article published by Foley talks the current legal and deal landscape and discuss a potential shift in the market. It also analyzes potential techniques and deal terms that may become more popular as we enter an unknown future regarding mergers and acquisitions.
Legal and Economic Landscape
For dealmakers (and their attorneys) 2021 was the best year on record for global M&A, with more than 60,000 publicly disclosed deals and the aggregate deal value breaking $5 trillion for the first time. Since then, M&A activity in 2022 has slowed from its rapid pace in 2021. The value of the global M&A market fell by nearly 20% to $2 trillion in the first half of 2022 compared to the same period in 2021. The total deal market is likely to fall further as economic fallout is reflected in global markets, according to PwC’s “Global M&A Industry Trends: 2022 Mid-Year Update” report. Looking forward, M&A deals are facing the most uncertain and complex environments in recent memory.
