The number of $10 billion-plus M&A deals worldwide picked up in April, but the biggest transactions were smaller in value than usual during the month.

Three M&A deals with a value of at least $10 billion were announced in April, one less than the total from the entire first quarter, according to S&P Global Market Intelligence data. However, the average size of the April transactions was just $13.10 billion. If that run rate holds for the duration of the second quarter, the period would have the lowest average transaction size of $10 billion-plus deals in at least five years.

Life Storage process

The largest M&A deal announced in April was Extra Space Storage Inc.'s $16.01 billion transaction for Life Storage Inc. The announcement ended a process for Life Storage that started in February after the disclosure of Public Storage's $14.45 billion unsolicited bid for the company.

After receiving the Public Storage offer, Life Storage's board and deal advisers engaged with several other parties, Life Storage CEO Joseph Saffire said during an investor conference call to discuss the deal.

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"We created an even playing field to ensure that all interested parties were given access to the same information, had the same opportunity to conduct diligence, and were put in the same position to submit their best offer," Saffire said.

Two bidders made their final offers on Friday, March 31, and over the weekend, Life Storage decided to go with the Extra Space offer, Saffire said.

Real estate rise

The deal between the self-storage real estate investment trusts adds to what has been a bit of an uptick in large real estate M&A transactions

The Life Storage deal marks the fifth real estate M&A transaction since the start of 2022 to top $10 billion. From 2018 through 2021, only eight real estate M&A deals topped $10 billion.

Health kick

Healthcare is often one of the most active sectors when it comes to big-ticket deals, and that continued in April with the announcement of Merck & Co. Inc.'s $10.26 billion deal agreement for Prometheus Biosciences Inc. The transaction marked the sixth $10 billion-plus healthcare deal since the start of 2022, a total that trails only the technology, media and telecommunications sector, which had 10 over the same time period.

Of the six healthcare deals announced, four of the targets were biotechnology companies, and large deals in the biotechnology space were expected coming into 2023. A January S&P Global Ratings report noted that large pharmaceutical and other highly rated biotech companies are sitting on significant cash balances that can be deployed in an effort to add to their product pipelines.

Merck's deal — along with Pfizer Inc.'s $42.82 billion announced deal for Seagen Inc. — is the second biotech transaction to top $10 billion in 2023, and more deals could be on the horizon. During an investor conference call to discuss the Prometheus deal, Merck CFO Caroline Litchfield said the company has "significant capacity to pursue our capital allocation priorities, including future business development should additional attractive opportunities arise."