EY comments on UK M&A activity for July – September 2022 published by the ONS

EY comments on UK M&A activity for July – September 2022 published by the ONS

Steve Ivermee, UKI Strategy and Transactions Leader at EY comments:

“The third quarter of 2022 saw consistent levels M&A activity in line with pre-pandemic activity, although volatile stock prices, rising interest rates and growing economic uncertainty are likely to dampen appetite for dealmaking in the short-term.  

“The current challenging pricing environment is holding back deals, as many sellers may be struggling to let go of last year’s record valuations while buyers are waiting to acquire at repriced levels. Tighter credit markets are also having an impact on larger cap deals as buyers struggle to secure funding, prompting more caution when it comes to acquisitions.

“Despite this, there are still deals being done in the UK and cross-border involving UK companies. A total of 459 completed domestic and cross-border deals took place during the quarter, predominantly in sectors like industrials, technology and energy, driven by the current energy market challenges and broader energy transition efforts.

“The results of the latest EY Global CEO Outlook survey show that CEOs’ deal intentions remain broadly positive. More than half of CEOs (52%) plan to make an acquisition in the next year, while almost half (40%) of respondents plan to be active on all fronts, looking to acquire, divest and enter new joint ventures or strategic alliances.

“Although the current deal environment looks challenged in the short-term, strong corporate balance sheets and record private equity dry powder mean the fundamental themes for M&A opportunities are still present and companies and investors are still seeking growth.”