Still Busy M&A Agenda in 2022

After a year 2021 of record high M&A activity, multiple indicators stay in green in 2022: ample liquidity and high generation of cash flow, decrease of P/E multiples… However, the increase in cost of debt in a context of monetary policies’ normalization, geopolitical uncertainty, the strengthening of anti-trust and sovereignty issues will weigh on the trend. We forecast $5300bn of mergers/acquisitions this year after a record high of $5800bn in 2021. In China, the trend is on deceleration for the transborder M&A transactions along with a growing difference expected in the coming years between inbound and outbound M&A from China. Increase in rates and margins in anticipation of monetary tightening should lead to lower LBO volumes in 2022 after a record in 2021 (€516bn). We distinguish 4 drivers of M&A for 2022: i/ digital transformation supports M&A in software and platforms sectors; ii/ energy transition ( auto s , utilities, oil); iii/ regulation (labs, insurance); iv/ extraction of value for shareholders (Telecom, Food, Chemicals, Banks, Pharmaceuticals).