Worldwide dealmaking has plunged in the first quarter of this year after the invasion of Ukraine sent shockwaves through global financial markets.
Mergers and acquisitions totalling $989.5bn have closed so far this year, down 20 per cent on the same period last year, according to analysis from deals database Refinitiv.
The first quarter of 2022 currently marks the first sub-$1tn quarter for global deal making since the second quarter of 2020 when global markets were sent into a spin by the pandemic.
War in Ukraine has dampened the appetite for dealmaking, but analysts say soaring inflation and rising interest rates had already caused investors to curtail what has been a major post-pandemic boom.
“Even before the invasion, the deals boom had started to show signs of fatigue in Europe, although most bankers did expect 2022 to be pretty busy,” says John Farrugia, managing partner at FinnCap told City A.M. last month.
Dealmakers have also stepped back from deals slated for completion this year amid the market volatility.
Withdrawn M&A has topped $204.9bn globally so far during 2022, 20 per cent more than the value recorded during the first quarter of 2021 and the highest first quarter total since 2018.
The plunge in overall deal value this year has been sharp, after a record $594bn worth of M&A deals were announced globally in December 2021.
January’s total was 34 per cent lower and the total plunged a further 15 per cent in February 2022.
Individual deal value has also suffered from market uncertainty, with 69 deals worth $1bn or more have been announced so far during 2022, 95 less than last year.