M&A activity in US, Canada recovers in March after prolonged slump

A spate of multibillion-dollar deals in the US and Canada during March pulled corporate merger and acquisition activity from a more than yearlong slump.

A total of $136.74 billion of M&A deals were agreed upon in March, up from $64.9 billion in February and a 10.8% increase from March 2022, according to S&P Global Market Intelligence data. This was the first month to post year-over-year growth in the value of M&A since January 2022.

The total value of North American M&A in the first quarter was $253.05 billion, a decline of 44.7% from the comparable period in 2022. The number of transactions fell 28.2% year over year to 4,270.

Big deals give March a boost

Rising interest rates and a slowing economy continued to weigh on companies keen to reduce leverage and exposure to higher borrowing costs.

The aggregate value of deals in the first quarter is even lower compared with the first quarter of 2021 — down 58.2% — when dealmaking caught fire, buoyed by cheap and plentiful capital and a recovering economy.

Still, some big deals came through in March, most notably in healthcare. The three largest agreements by value in the first quarter, and six of the top 10, were announced or completed in March as activity picked up after a slow January and February.

Pharmaceutical giant Pfizer Inc.'s $42.84 billion agreement to buy biotechnology company Seagen Inc. is the largest deal of the year so far by a distance and would have been the third-biggest transaction in all of 2022.

The Pfizer deal, along with CVS Health Corp.'s $10.36 billion agreement to take over Oak Street Health Inc., buoyed healthcare to lead the way in M&A value in the first quarter at $68.14 billion. Technology, media and telecommunications, and industrials were the next-largest sectors at $39.18 billion and $28.45 billion, respectively.

Goldman Sachs Group Inc.'s $21.45 billion takeover of the securities portfolio of SVB Financial Group's failed bank subsidiary, part of the resolution of the banking turmoil in March, was the second-largest individual deal. Private equity group Silver Lake Technology Management LLC's planned $10.44 billion takeover of software company Qualtrics International Inc. with Canadian pension fund Canada Pension Plan Investment Board was the third-largest.