The global M&A market is both happy and worried

Recently, the global data processing company Dealogic released data showing that the total amount of global M&A transactions in the second quarter of this year dropped from $1.14 trillion in the same period last year to $73.82 billion, a year-on-year drop of 36%, due to the continuous high interest rates and the Debt limit farce in the United States.
From a regional perspective, in the second quarter of this year, the size of mergers and acquisitions in the United States decreased by 30% to $318.4 billion, while the size of mergers and acquisitions in Europe and the Asia Pacific region decreased by 49% and 24% respectively.
However, the total global M&A transactions in the second quarter were still higher than in the first quarter, which has also led some people to continue to be optimistic about the global M&A market. Analysts believe that the global M&A market is bottoming out and rebounding, and companies must achieve organic growth if they want to continue to compete locally and globally.
From the second quarter, some merger and acquisition cases are quite representative and worth paying attention to. Among them, Carrier Global plans to acquire the largest climate solutions company under the German Fishmann Group for over 12 billion euros, making Carrier Group one of the largest climate solutions groups in the world. Daimler Trucks and Toyota Motor will merge the Japanese truck business, and the new company will become the world's largest alliance in the field of medium and heavy trucks. Bunge, an American grain trader, agreed to acquire Vita, a subsidiary of its peers, Swiss mining and trading giant Glencore, with US $8.2 billion in stock and cash. After the merger, the two sides will form a global grain trading giant with a scale large enough to compete with ADM and Cargill, and may reshape the pattern of global grain traders.
Compared to the world, mergers and acquisitions in the Asia Pacific region have shown great resilience. The International Monetary Fund predicts that the economic growth of the Asia Pacific region will be 4.6% in 2023, and its contribution to global growth will reach about 70%. This has created favorable conditions for the Asia Pacific M&A market. According to the 2023 Global M&A Trader Sentiment Report, 86% of M&A traders in the Asia Pacific region believe that M&A activity will increase in the next 12 months; Most M&A traders in the Asia Pacific region believe that the need to increase market share and Digital transformation will promote their M&A activities in the next 12 months.
Currently, the downward pressure on the world economy is further increasing. However, from a historical perspective, the economic downturn period is usually also a window period for enterprises to carry out mergers and acquisitions. Bain Company has studied the M&A activities of nearly 2900 companies during the economic recession period from 2008 to 2009. The research shows that companies that conducted M&A during this recession outperformed in the long term, and those that conducted one or more acquisition transactions achieved a compound growth rate of 5.9% between 2007 and 2017, higher than those without acquisition transactions.
It is worth noting that global M&A transactions still face some uncertain factors. For example, the strong stance of European and American central banks in raising interest rates will inevitably increase the cost of corporate financing. In addition, with the introduction of a series of antitrust measures, regulatory agencies may increase their scrutiny efforts. The future direction of global M&A activities remains to be observed.