PwC | Global M&A Industry Trends: 2022 Outlook

Global mergers and acquisitions (M&A) hit new highs in 2021—breaking prior records by a long shot. The number of announced deals exceeded 62,000 globally in 2021, up an unprecedented 24% from 2020. Publicly disclosed deal values reached all-time highs of US$5.1tn—including 130 megadeals with a deal value greater than US$5bn—a whopping 57% higher than in 2020 and smashing the previous record of US$4.2tn set in 2007. The often-frenzied M&A activity in 2021 was fuelled by intense demand for technology, and for digital and data-driven assets, and the pent-up deal-making demand from 2020 that was unleashed.

We don’t expect these records to be smashed in 2022. But all the indications point to another supercharged year. Economic optimism remains high, there’s a strong deals pipeline, capital is in abundance, and companies across all industries badly need technology. It is true that there are growing headwinds. The trifecta of low operating costs, lower regulation and taxes, and ever lower interest rates have, over the past decade, helped companies achieve year-on-year earnings growth, pushed stock markets to seemingly endless record highs, and generally spurred M&A. But now, each of those pillars is facing pressure for the first time in a decade, as the pandemic has disrupted the status quo. As a result, higher interest rates, rising inflation, increased taxes and greater regulation could introduce structural or financial hurdles or delays for deals in 2022. We are already seeing greater volatility in financial markets, further disruptions in the global supply chains and increased levels of fiscal debt, as shockwaves from the pandemic continue to play out globally. As we’ve already learned from the pandemic, dealmakers should stay alert to how the new accelerated pace of change can bring these factors—or others—into play earlier and with greater impact.

Even so, business leaders are seemingly undaunted by these macroeconomic headwinds. For the second year in a row, PwC’s annual global CEO survey, the 25th edition of which was published in January 2022, has found that 77% of CEOs expect global economic growth to improve during the year ahead. Furthermore, more than half of CEOs reported high levels of confidence for revenue growth in their own companies over the next 12 months; led by CEOs of private equity (67%) and technology companies (64%), two sectors which saw the highest M&A volumes and values in 2021.

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