By Ben Eguzozie
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Down 37.5% from 2021 value of $8.72trn
The global sector of mergers and acquisitions (M&A) has seen its fair share of big deals and influential transactions in recent years. Despite the changing economic health, a substantial share of the transactions has been handled by a select group of financial advisors who oversaw deals running into billions of dollars.
In particular, data acquired and calculated by Finbold about the top 10 leading global M&A advisors accounted for deals valued at $5.84 trillion in 2022. However, the value represented a drop of about 37.5 percent or $2.87 trillion from the $8.71 trillion registered in 2021.
As 2023 unfolds, it is expected that the financial advisors will experience improvement in financial markets as a trigger to accelerate their involvement in M&A activity.
According to the research, Goldman Sachs, banking giant, emerged as the leading M&A advisor by value in the year under review (2022), overseeing 393 deals worth $1.24 trillion. Though this was a drop of 29.87 percent from its 2021 deals of $1.77 trillion. JPMorgan ranked second, with 360 deals at $915.3 billion, which also represented a drop of 38.82 percent from its 2021 record. Morgan Stanley was third in the ranking, with deals valued at $836.8 billion in 2022. The value of the deals represented a year-over-year (YoY) decrease of 34 percent.
Elsewhere, Bank of America Securities represented the fourth-highest deal value last year at $689 billion from 285 activities. Citi ranked fifth last year, with deals worth $671 billion, representing a YoY drop of 25.95 percent. Barclays was sixth with 208 deals valued at $458.1 billion, which showed a fall of 37.24 percent from its 2021’s figure of $729.9 billion.
Furthermore, Credit Suisse, with deals valued at $311.2 billion, ranked in the seventh spot, while Evercore Inc had deals with a valuation of $247.2 billion, placing the bank in the eighth spot, followed by BNP Paribas at $238 billion. Notably, Rothschild & Co accounted for the highest number of deals in 2022 at 411, bringing the valuation to $237.8 billion to rank tenth.
Economic turmoil’s impact on M&A valuations
Finbold’s research emphasised factors that likely influenced the valuation of deals handled by the ten leading financial advisors in 2022. “Overall, the data shows a clear contrast in the number of deals and valuations handled by the ten financial advisors between the two years. The contrast can also be linked to the 2022 uncertainty that engulfed the financial markets stemming from geopolitical instability, rising inflation, supply chain challenges, and regulatory changes,” the research report indicated.
