Global M&A 2023: Value Slump, Megadeals Persist & What’s Coming in 2024-25

The year 2023 saw global M&A deal value fall to around US$2.6 trillion — the lowest level in over a decade — due to macroeconomic headwinds such as inflation, high interest rates, and regulatory pressure. [1][2] Despite the drop in value, deal volume remained strong, exceeding decade averages, suggesting that corporates remained active, though at smaller scale. [1] Megadeal activity (transactions over US$10 billion) was resilient, with 28 such deals in 2023, and a late-year surge in deal announcements in Q4 (~US$750 billion) points to recovering confidence. [1][2]

Sectoral analysis reveals distinct winners and losers. Energy, Resources & Industrials (ER&I) grew by around 8% YoY, reaching US$868 billion, buoyed by large transactions in oil and gas. [2] Life Sciences & Healthcare also saw growth (+9%) to US$327 billion in value, particularly in deals between US$1–10 billion. [2] In contrast, Technology, Media & Telecoms (TMT) saw a sharp fall (~39%) in deal value, though volumes held relatively steady; Financial Services was down approximately 42% YoY to about US$393 billion in value. [2][4]

Bain & Company, corroborating the Deloitte findings, estimated that total strategic deal multiples fell to 10.1× in 2023 — the lowest in 15 years — which led to a hesitation among sellers and widen valuation gaps. [3] GlobalData offered slightly differing numbers — US$2.2 trillion for deal value and ~30,883 deals in 2023 — indicating some turbulence in data depending on source definitions and sensitivity. [3][5]

Strategically, the environment signals both defensive and offensive imperatives. On the defensive side, M&A as a tool for portfolio optimization, supply chain resilience, ESG and net-zero alignment is rising. On the offensive end, companies are seeking transformative growth via capacity-building, digital capabilities, sector adjacent expansion, and cross-sector convergence. [1][2] Key risks include regulatory interference, valuation mismatches, rising cost of capital, and macro uncertainty.

Open questions for corporates and dealmakers heading into 2024/25 include: Will interest rates stabilize enough to reduce cost of capital? Can regulatory delays or scrutiny tilt the balance of attraction toward segmented dealmaking? How will ESG demands and sector convergence reshape deal terms and valuation norms? And to what extent will megadeals drive overall recovery versus volume-based contributions from smaller transactions?