Year in Review: Blockbuster Deals Amid 2022’s M&A Bust

M&A activity has plunged in 2022, dropping 36% from its highs in 2021. As the world’s economies have languished in the face of surging inflation and increasing interest rates, companies have scaled back their appetites for mergers. In fact, M&A activity dropped in Q3 to levels not seen since Q4 2020.

Despite this drop from last year’s blistering deal pace, however, activity is on pace to surpass pre-pandemic levels. Viewing the figures in this light, M&A activity has not so much as crashed – but instead returned to earth.

Despite the relative decline in M&A activity overall, the U.S. market has been host to blockbuster deals this year. Matterhorn’s M&A database tracks publicly-announced deals over $25 million in value, harnessing both AI and attorneys to digest the granular deal points of each transaction to allow for comparisons across industries, specific deal terms, and both legal and financial advisors.

The top 5 deals of 2022 are quite telling: they mirror the turmoil of the times. Microsoft’s proposed $68.7 billion acquisition of Activision shocked analysts and has elicited antitrust scrutiny, as predicted. The Biden Administration has vowed more muscular antitrust policies and has quelled M&A activities has it has followed through on these threats across industries. 

Broadcom’s acquisition of VMWare comes in second at $61 billion, followed by X Holdings I, Inc. chaotic acquisition of Twitter, Inc. for $44 billion. Next, Prologis acquired Duke Realty in October for $26 billion. Rounding out the top 5 is Kroger Co.’s $24.6 billion acquisition of Albertsons Companies, Inc., which has faced criticism from lawmakers and consumers over competition concerns. Also as predicted, Kroger has received a request for additional information from the Federal Trade Commission.

Although some analysts were incorrect in predicting that 2022 activity would surpass 2021’s, hope springs eternal: some now forecast increased activity ahead in 2023. Between increasing interest rates, a warnings of recession, and increased government regulation, the once-booming M&A market will continue to face headwinds as it strides into the new year.