The value of global deals fell below $3 trillion in 2023, for the first time in 10 years, after the global economy suffered during the year the pressures of raising interest rates and geopolitical tensions, including the Israeli aggression on the Gaza Strip, according to the British newspaper “Financial Times” quoting experts. .
Data from the London Stock Exchange Group show that transactions worth $2.9 trillion were concluded globally this year, a 17% decrease from 2022. This is the first time since 2008-2009 that the value of announced deals declined by more than 10% for two consecutive years.
Extremely slow
For her part, Simona Millari, an official at the Swiss UBS Bank, said that the year 2023 was a “very slow” year, and quieter than expected, given the volume of transactions.
Europe suffered the largest decline, as deals fell by 28% year-on-year, while the value in Asia and the Pacific fell by 25%, and in the United States by 6%.
Dealmakers have had to confront challenges on multiple fronts, with mergers and acquisitions already in decline following the coronavirus-era surge in activity, with regulators taking a more aggressive approach, and a rapid increase in global interest rates cooling the private equity market.
In this context, the value of two deals from the American energy companies Exxon Mobil and Chevron – each worth more than $50 billion – increased the volume of transactions in the last months of this year, as the value of deals concluded in the last quarter was 28% higher than the third quarter, according to the Financial newspaper. Times About Data.
The aggression against Gaza
But the Israeli aggression on the Gaza Strip, which began on October 7, halted the pace of these increases on a large scale.
The newspaper quoted Marc Sorrell, co-head of global mergers and acquisitions at Goldman Sachs, as saying that the regulatory environment was difficult during the year, and while morale was improving, “what happened in the Middle East happened,” referring to the war on the Gaza Strip.
The value of deals from financial sponsors fell by 30% over the past year to $562 billion, and consultants said that private equity groups had difficulty agreeing on asset valuations, as the British company Brookfield’s suspended plans to sell the “Center Parcs” holiday resort group for more than 4 billion pounds. ($5.1 billion) shows the difficulty of finding investors willing to pay at a time of high interest rates and inflation.
Additional stress
Dealmakers expect private equity groups to come under more pressure to close deals next year after a long slowdown in activity.
For his part, Carsten Wohren, co-head of mergers and acquisitions in Europe, the Middle East and Africa at JP Morgan, said that this year witnessed successful exits by the most courageous sellers who own the best assets, and each process was “more organized and complex,” despite the fact that What he said.
In this context, the stricter stance of the competition protection authorities has led to preventing companies from submitting offers to buy competing companies, and the American company Microsoft’s acquisition of Activision Pizzard Games for $75 billion has succeeded in challenging the challenges after 21 months of uncertainty, but on the other hand, it has eliminated The American company Adobe announced the acquisition of Figma Software Group for $20 billion, after investigations by oversight bodies in the European Union and Britain.
Returning to the data, global investment banking fees – due to a slowdown in deals – fell by 8% year-on-year to reach $105 billion.
Mergers and acquisitions fees fell 26% to $29 billion, the lowest level since 2016.
Goldman Sachs ranked first in mergers and acquisitions advisory work, followed by Morgan Stanley and JP Morgan in second and third places, leading in Asia and Europe, respectively.