The slow pace of large M&A deals continued in February.

Only two global transactions announced in February topped $10 billion: CVS Health Corp.'s $10.42 billion agreement to purchase Oak Street Health Inc. and Newmont Corp.'s bid of more than $18 billion for Australia-based Newcrest Mining Ltd. Both deals were larger than any M&A transactions announced in January.

At the current run rate, the first quarter is set to produce one of the lowest totals of large announced M&A deals in recent years.

Low marks

Since 2020, only two quarters generated less than five $10 billion-plus M&A deals. One of those was during the second quarter of 2020, when only three deals of that size were announced, according to S&P Global Market Intelligence data. The third quarter of 2022 also had just three $10 billion-plus deal announcements.

In the fourth quarter of 2022, large deal activity picked up with eight $10 billion-plus deal announcements, but the increase was short-lived.

Regulatory road

A more challenging regulatory approval environment has led to some hesitation among potential M&A players when considering bigger deals. However, CVS executives expressed confidence that the company can close the Oak Street deal in less than a year.

During CVS' earnings call in February, Credit Suisse analyst A.J. Rice noted that the approval process is "a little less certain than it was a few years ago" and asked if the transaction could become more expensive if the closing date is pushed into 2024. CVS President and CEO Karen Lynch said, "We do expect to have this transaction close."

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CVS is also confident that it will close another deal — an about $8.00 billion acquisition of Signify Health Inc. — in less than a year. When the Signify deal was announced in September 2022, the companies said they expected to close the deal in the first half of 2023. During the February earnings call, CVS executives said the Signify deal is expected to close in the second quarter.

Unsolicited offer

The Newmont offer for Australia-based Newcrest would mark a potential combination of gold producers. Newcrest has yet to accept the offer, but during Newmont's earnings conference call in February, President and CEO Thomas Palmer said the company would continue to engage the Newcrest team.

If the deal does not progress, it would further depress the large M&A deal totals.