Problem
Article: Market Mayhem Triggers Deal-Making Drought By Laura Cooper | August 1, 2022
Topics: Mergers and Acquisitions
Summary: Merger activity has slowed dramatically after a record year in 2021, and some deal makers are bracing for an even quieter second half. In the U.S., about $1 trillion of deals had been struck in 2022 through late July, according to Dealogic. That is the lowest in five years-excluding 2020, when deal-making ground to a halt at the outset of the pandemic-and a nearly 40% drop from the same period in 2021. Globally, some $2.4 trillion of deals were announced, representing a roughly 30% decrease. The total number of transactions also was down.
Task
i. What factors have led to the decline in M&A?
ii. What is the relationship between the financing environment and M&A activity?
iii. What is the role of private equity in relation to deal activity?
iv. What conditions do you think would be required to support a rebound in M&A activity during the second half of the year?