M&A in 2022: Key trends

While global mergers and acquisitions hit an all-time high in 2021, looking ahead to 2022, a strong M&A pipeline remains. We take a look at the trends to look out for in the sector this year.

Mergers & Acquisitions special report looks at the top deals of the year, how companies can avoid problems after a merger, US activity in the Irish market and what 2022 holds in terms of deals.

[ The Irish Times ePaper ]

Technology

Zoom meetings, online due diligence or virtual walk throughs may have been borne out of the pandemic but are here to stay. Practical and effective online ways of walking through a facility or meeting with new teams would have seemed outrageous only a few years ago but this approach is working. There is none of the juggling of international travel schedules to deal with and more team members can make it into a virtual room together.

Robots and drones meant that tours of factories, warehouses or plants could continue during lockdowns and this has led to cost efficiencies and has sped up the process in several instances. There is now likely to be a more hybrid approach in the future, with a mix of online and in-person meetings.

Global regulation

Global regulation is always scrutinised by those involved in M&A but tensions between regions is causing much uncertainty and impacts on investment decisions – even more than the pandemic has. For example, since Brexit the UK’s Competition and Markets Authority now has more independent authority when it comes to deal oversight.

ESG

Private equity firms are committing further to their environmental, social and governance (ESG) positions but for individual companies it is not yet a big deal driver. In the midst of any deal, executives should conduct ESG due diligence – sustainability is already part of corporate strategy but it’s important to look at the “E” and “G” too. This area will become more standardised in the future and it will become easier to access information on a company’s ESG policies.

Deal size

Deals in the $1bn-$5bn range have been the go-to for private equity firms in the past but there will be an appetite among such firms for larger and more complex deals. One example of this is the $30bn acquisition of Medline Industries, Inc, by a partnership comprised of funds managed by Blackstone, Carlyle and Hellman & Friedman, and the proposed $14bn acquisition of McAfee Corp by an investor group led by Advent and Permira, Canada Pension Plan Investment Board, GIC, Crosspoint Capital, and a wholly-owned subsidiary of the Abu Dhabi Investment Authority.