M&A resilience predicted in 2023, despite economic uncertainty
Lex Mundi, a global network of independent law firms, has gathered intelligence from member law firms across 71 jurisdictions to analyse recent and upcoming trends for its latest Global M&A Trends Report.
A majority of M&A practitioners worldwide remain optimistic about the prospects for mergers and acquisitions in 2023. Despite concerns about the global economic situation, many experts believe that the number of deals across public and private transactions will either remain steady or increase. The report, which highlights the key global trends for M&A, was released by Lex Mundi.
The economic environment is identified, across all regions (other than Latin America and the Caribbean), as the pressing concern for private company M&A practitioners (24 per cent) – not least caused by the tremors of global headwinds of inflation, interest rate rises and geopolitical tensions destabilising markets – rating above other concerns such as ESG pressures (3 per cent) and political environment (9 per cent) and valuation expectation gaps (13 per cent). For public M&A practitioners, the picture is largely the same – the most pressing concern was economic environment (22 per cent), and the same weight was given to valuation expectation gaps as a commercial concern as that seen for private company M&A (13 per cent). For deal volume predictions for 2023 the picture for private and public M&A is also largely mirrored – 49 per cent and 53 per cent respectively expect deal volume in 2023 to be the same as it was in 2022. Despite the positive outlook, there are a number of member law firms which are expecting some drop-off in activity.
Jenny Karlsson, Lex Mundi’s head of North America within the Global Markets team, commented, “Given the turbulence caused by rising interest rates and inflation in the global economy, it is not surprising that a majority of practitioners identify these factors as key influencers of the transactional landscape for 2023. However, our report reveals that many practitioners are largely optimistic and anticipate at least as many deals in the year ahead, if not more. This positive outlook bucks the conventional wisdom that financial turmoil leads to a decline in transactions. Overall, our report suggests that, despite the current challenging environment, many dealmakers remain willing to take risks and invests.”
Global M&A Trends 2023 identifies key concerns, deal activity by sector and deal volume predictions with selected regional insight for Asia and the Pacific, Europe, Latin America and the Caribbean, the Middle East and Africa, and North America. For further insight into the trends and 2023 predictions from our member firms across each of those key regions, download the fourth annual edition of the Lex Mundi Global M&A Trends Report (https://www.lexmundi.com/resources/insights/m-a-trends-report/).
The Lex Mundi Global M&A Trends Report provides readers with a concise overview of the insights and predictions of M&A practitioners across 71 jurisdictions in the Lex Mundi network. Over 50 Lex Mundi member law firms contributed to the report, including Afridi & Angell, member law firm for the United Arab Emirates, Baker Botts LLP, member law firm for Texas, USA, Deacons, member law firm for Hong Kong, and S. Horowitz & Co., member law firm for Israel.
