Global M&A Deal Volume and Value Still Rising in Q3 2024 as IPOs Stall

Key Findings

• Stock market volatility led to the total value of equity issuance falling nearly 33% to $65.63 billion from second quarter levels and nearly 21% from the year-ago period.
• The number of global M&A announcements increased quarter over quarter for the second straight period, the first time that has happened since the third and fourth quarters of 2020.
• The total value of global M&A deals increased 29.1% year over year to $708.74 billion in the third quarter.

M&A and equity issuance dealmaking is still struggling to fire on all cylinders.

The backdrop for the transactions became much more conducive when the Federal Reserve officially started the rate-cutting cycle in the US by announcing a 50-basispoint reduction to its benchmark rate Sept. 18. However, geopolitical concerns — including escalating conflicts in the Middle East and changes in government leadership — along with volatility picked up during the third quarter. The headwinds created uncertainty and slowed momentum in various markets.

Elections across Europe created uncertainty that pushed dealmakers to the sidelines for M&A and IPOs. The lack of European M&A and IPOs was partially offset by increased activity in the Asia-Pacific region.

Thanks to the dealmaking from the Asia-Pacific region, global M&A announcements increased from the previous quarter and year-ago period. While the increase was modest, the positive turn is noteworthy because the number of transactions has been trending down since 2022, when the Federal Reserve began its aggressive interest rate hiking schedule to combat inflation.

The global IPO market, however, could not bounce back after a spike in volatility in August that saw the VIX — the Chicago Board Options Exchange S&P 500 volatility index — reach 65.7, the highest point since the height of the pandemic in March 2020. The volatility remained elevated as the VIX recorded an average close of 18.6 in August and September up from an average close of 14.0 over the prior seven months.

This resulted in issuers delaying plans to go public and hurting the nascent recovery in IPOs. July had the second-highest total proceeds from global IPOs in 2024, while August and September generated less proceeds than any other month in 2024.

India was one of the outliers when it comes to IPOs. Retail investors have supported the deals, and more companies have gone public in the first three quarters of 2024 than full year 2023.

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