Value of Irish M&A activity falls in 2022 as inflation crisis hits activity

The value and number of buyouts involving Irish companies fell last year amid a global slowdown in activity linked to “rising interest rates and persistently high inflation”.

According to legal firm William Fry, there were 300 mergers and acquisitions (M&A) in the Republic in 2022, a 2 per cent drop on the previous year, which was considered an outlier.

The value of those deals came to €14.8 billion, which was 38 per cent lower than the previous year, but the total excluded Amgen’s high-profile $28 billion (€26.6 billion) offer for Dublin-based biotech Horizon Therapeutics, announced in December.

Mid-market transactions dominated M&A activity in Ireland last year, William Fry noted with 90 per cent of deals falling into the mid-market segment, with transaction values of between €250 million and €500 million.

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The larger end of the market was also active, with seven transactions worth more than €500 million in 2022 having a total aggregate deal value of €11.5 billion.

Only 2021, with nine large deals worth €16.2 billion (a merger market record), exceeded these 2022 totals.

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The financial services sector accounted for more than half of the deals in value terms and four of the 15 largest deals. In terms of deal volume, the technology, media, and telecoms (TMT) sector was the dominant sector within the market.

With significant transactions such as Partners Group’s acquisition of Version 1 and JP Morgan’s acquisition of Global Shares, the TMT sector accounted for 22 per cent of all M&A deals by volume in Ireland during 2022, the company said.

Overseas acquirers conducted 216 inbound transactions in Ireland, one more than in 2021, but the total deal value for inbound transactions fell by almost a third to €12.5 billion. Last year saw 84 deals that involved domestic players only, down marginally from a total of 92 in 2021. Those included the €1.1 billion Hibernia REIT acquisition by Benedict Real Estate.

Stephen Keogh, head of corporate/M&A at William Fry, noted: “Ireland is not immune to the headwinds buffeting the global economy. Rising interest rates, persistently high inflation, slower growth in Western markets, war in Ukraine and global supply chain disruption all present significant challenges.

“Ireland appears, however, to be weathering the storm more comfortably than many other countries and the economy continues to outperform. While the bumper M&A year of 2021 was always going to be difficult to match, the data for 2022 is strong despite something of a slowdown in the second half of the year.”