Mergers & Acquisitions activity has slowed from its record-setting 2021 pace, with economic headwinds stunting deals in the first half of 2022. However, setting aside the quarter-on-quarter decline, the number of deals are still higher than pre-pandemic levels of approximately 13,000, with total disclosed deal values of USD 1.08 Tn. The headwinds from the first quarter have only grown more robust, with new ones emerging, including skyrocketing inflation, a weak capital market performance, a looming recession, and the energy crisis deepened by geopolitical unrest. All the above factors contributed to ~25% and ~16% quarter-on-quarter decline in terms of deal value and volumes, respectively.
While correction in the broader technology space has deterred M&A activity globally, IT and ITeS sectors continue to lead the M&A front (as has been the case in the last 29 months). One of every five deals (based on the total number of deals) and one of every four deals (based on the total disclosed deal values) emerged in the Technology space, underscoring the presence of many megadeals and the impact of digital transformation as a key enabler in driving such deals.
In this quarterly update, Zinnov’s M&A Advisory team explores critical data points and M&A trends across the Technology & Services industry, shedding light on: