Blog — 9 Aug, 2024
Global M&A and Equity Issuance Values Rise Despite Fewer Deals in Q2 of 2024
By Joe Mantone, Brian Scheid, and Umer Khan
Highlights
The number of global M&A transactions has fallen below 10,000 in three of the last four quarters after having done so only once since 2020.
Large transactions helped boost the total value of Europe M&A announcements by 65.4% quarter over quarter and 25.4% year over year in the second quarter to $182.87 billion.
The 616 global IPOs in the first half of 2024 was lower than the 674 transactions in the first half of 2023 and the 872 transactions in the first half of 2022.
Bigger-ticket transactions helped boost the total value of M&A and equity issuance during the second quarter even though the number of the deals remained muted.
A pickup in $10 billion-plus M&A announcements outside the US helped ensure that the total value of global deals recorded its third straight quarter of year-over-year growth, but the number of deals fell for the 10th straight time quarter over quarter. The total value increased quarter over quarter despite the number of deals dropping 13.5% year over year.
Still, the total value of deals for M&A as well as equity issuance remains far below the levels recorded in 2021 — when dealmaking was booming — and even levels recorded during the pre-pandemic years of 2018 and 2019. Dealmaking has yet to recover from the slowdown in activity that started in 2022 with the rate-hiking cycle.
Investment bankers had hoped that M&A would pickup once the rate increases ended. The thinking was if rates stayed flat executives would have clarity on financing costs, and they would be more willing to pursue transactions. However, the Federal Reserve has not raised rates since July 2023, and flat rates in recent quarters have failed to serve as a significant catalyst to M&A.
Similarly, low volatility in the equities market has done little to boost initial public offerings. During the first half of 2024, the average close of the VIX — the Chicago Board Options Exchange S&P 500 volatility index — was 13.9, far below the average close of 20.6 from the start of 2018 through 2023.
The US IPO market has shown some signs of life during the first half of 2024. The total value of US IPOs was up 42.1% from the year-ago half, and the number of US IPOs grew 30.4% over the same period.
The total value of IPOs from Europe is also up significantly year over year. In the region, the total value raised from the deals reached $16.65 billion over the first half compared to $3.18 billion over the first half of 2023. However, the number of deals only increased to 66 in the first half of 2024, compared to 64 in the first half of 2023.
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