Global M&A Deals Hit Lowest Level In Decade 

Global mergers and acquisitions deals (covering a wide variety of transaction types) are at the lowest annual level in a decade as high interest rates, slowing economies, and geopolitical tensions challenge dealmakers. 

Data compiled by Bloomberg shows the value of M&A deals this year has reached $2.7 trillion so far - the lowest level since 2013. Compared with 2022 figures, there has been a quarter drop. 

"It has just been a lot harder to get things done this year and people have looked for reasons not to do deals. I don't really see that changing very much right now," Jay Hofmann, co-head of M&A for North America at JPMorgan Chase & Co., told Bloomberg, adding, "People aren't inclined to look past challenging issues to get deals through."

Melissa Sawyer, global head of law firm Sullivan & Cromwell LLP's M&A group, said the steepest global tightening cycle in a generation complicated the M&A field. 

However, Sawyer pointed out that the Federal Reserve's pivot from interest rate hikes to cuts next year could revive the dealmaking activity. 

"People are predicting that the central banks are not going to raise rates again so we seem to have reached the peak of the arc of rate increases. 

"As people have a sense that rates have stabilized, people will be ready to fire up the M&A engines again and get back to work."

M&A Global Deal Values vs. Interest Rates 

"Private equity activity will pick up meaningfully once we have more alignment between buyers and sellers on valuation. That is starting to happen now but we think it will take another six months or so," said Majid Ishaq, co-head of UK at Rothschild & Co.

Ishaq continued, "Buyout firms continue to look at take-private opportunities but they are difficult deals to execute, notwithstanding public market valuations having fallen, given that debt has become more expensive."

Even with elevated borrowing costs, several mega deals have been announced late in the year, including Exxon Mobil Corp.'s nearly $60 billion purchase of Pioneer Natural Resources Co. and Chevron Corp.'s acquisition of Hess Corp. for $53 billion.

Depressed dealmaking activity this year guarantees bleak bonuses and more job cuts for Wall Street. But next year, a Fed pivot could spark new optimism in M&A.  

Sawyer added: "As people have a sense that rates have stabilized, people will be ready to fire up the M&A engines again and get back to work."