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    Analysis: Mega Deals’ Secret Success in the 2023 M&A Market

    Emily Rouleau

    Apr 16, 2024

    2 min read

    Mergers & Acquisitions Mergers & Acquisitions Law
    Analysis: Mega Deals’ Secret Success in the 2023 M&A Market
    iStock.com/shannonstent

    Mega deals—just like the M&A market as a whole—had a bad year in 2023. But a closer look at the proportion of the M&A market represented by mega deals (M&A transactions valued at $10 billion or greater), and at the average sizes for these deals, shows that this market segment’s performance was surprisingly strong.

    On the Face of It, Mega Deals Had Dismal 2023

    For both global and controlling-stake M&A mega deals, 2023 was worse than 2022 (the worst year for global M&A mega deals in five years), with the lowest deal volumes in either category since 2013. Deal volumes for global M&A mega deals dropped 19.4% from $720 billion in 2022 to $580.3 billion in 2023. Controlling-stake M&A mega deals also saw a drop in deal volumes from 2022 to 2023, falling 5.8% from $574.7 billion to $541.2 billion.

    2023 Deal Volumes for Mega Deals Down From 2022's Lows. Deal volumes for mega deals, 2013-2023

    Source: Bloomberg as of Jan. 17, 2024. The data include all pending and completed mergers and acquisitions valued at $10 billion or greater and announced between Jan. 1, 2013 and Dec. 31, 2023.

    2023 Deal Volumes for Mega Deals Down From 2022's Lows. Deal volumes for mega deals, 2013-2023

    Deal counts for global M&A mega deals also dropped from 2022 (32) to 2023 (31), but controlling-stake M&A mega deals saw an increase in counts over the same timespan: There were 24 controlling-stake M&A mega deals announced in 2022 compared to 28 in 2023.

    Few in Number, Mighty in Volume

    Despite the general lack of exciting mega deal data for 2023, there was a nugget of optimism in the numbers. Mega deals represented 26.8% of the Q4’s global M&A deal volume—even though only nine of the 12,345 deals announced in Q4 2023 were mega deals.

    This was the highest proportion of total quarterly global M&A deal volumes from mega deals since Q2 2022 (31.0%) and the second-highest proportion in the last 13 quarters (since Q3 2020’s 29.4%).

    And none of the quarterly global deal volumes during record-breaking 2021 had a higher percentage of deal volume represented by mega deals.

    Proportion of Mega Deals Jumped in Q4 2023 for Two M&A Deal Types. Percentages of total quarterly deal volumes from mega deals, 2019-2023.

    Source: Bloomberg as of Jan. 17, 2024. The data include all pending and completed mergers and acquisitions announced between Jan. 1, 2019 and Dec. 31, 2023 and the percentage of those deals that were valued at $10 billion or greater.

    Proportion of Mega Deals Jumped in Q4 2023 for Two M&A Deal Types. Percentages of total quarterly deal volumes from mega deals, 2019-2023.

    The same was true for controlling-stake M&A mega deals. Controlling-stake mega deals comprised 31.9% of Q4 2023’s total deal volume, even though the deal count for mega deals (eight) represented just 0.1% of the number of controlling-stake M&A deals in the quarter (6,969).

    The percentage of deal volumes for controlling-stake M&A deals that came from mega deals in Q4 2023 was—again—the highest percentage since Q2 2022 (36.3%), and the second-highest in the last 13 quarters (since Q3 2020’s 36.7%).

    Mega deals represented an increased proportion of annual deal volumes for both types of M&A deals for all of 2023 as well, and both global and controlling-stake M&A mega deals comprised the largest proportions of their respective annual deal volumes since 2020.

    So even though deal volumes for global and controlling-stake mega deals were down year-over-year, a small count of mega deals comprised larger proportions of overall deal volumes in both types of M&A deals than has been seen in the recent past. The average sizes of global ($25.8 billion) and controlling-stake ($26.9 billion) M&A mega deals in Q4 2023 were the largest since Q2 2022, and were the second-largest average sizes for both types of mega deals since Q2 2019.

    This article was originally published on Bloomberg Law as “ANALYSIS: Mega Deals’ Secret Success in the 2023 M&A Market” on January 19, 2024.

    Reproduced with permission. Published January 19, 2024. Copyright 2024 by Bloomberg Industry Group, Inc. (800-372-1033) www.bloombergindustry.com

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