Finance Monthly - August 2023

9 Finance Monthly. The Monthly Round-Up ing the tyres a bit harder as they seek deals to address strategic priorities, expand into new markets and fill capability gaps.” The deal performance during the first six months of 2023 would have been substantially worse if not for the Asia-Pacific region, where buyers continue to outperform the rest of the world. APAC acquirers outperformed their regional index by +10.9pp. With 72 deals closed in H1 2023, the region still saw a 25% drop in volume compared to H1 2022 (96 deals). In contrast to the APAC region, North American acquirers underperformed their index between January and June by -5.9pp, while dealmakers from Europe underperformed their regional index by -8.3pp. The WTW data also shows: • Only three mega deals closed in the first half of 2023 compared to 12 deals in H1 2022. • Performance of acquirers in North America for the second quarter of 2023 at -10.3pp is the second worst on record, exceeded only by the same quarter in 2020, at the height of the Covid-19 pandemic. Acquirer performance in Europe during the last three months is the worst on record at -10.8pp. • Asia Pacific buyers have now achieved a positive performance for eight consecutive quarters. To put this in context, buyers in North America and Europe have only recorded two and one positive quarters respectively during the same period. • Intra-regional deals have increased for three successive quarters (compared to cross regional deals) and intra-sector deals also experienced a big jump from 57% in the first quarter of 2023 to 67% in the latest quarter (compared to cross sector deals), indicating a clear trend of buyers seeking deals closer to home. Mercereau said: “When inflation stabilises and credit markets re-open, we expect deal appetite to increase considerably fuelled by pent-up demand with digital transformation, portfolio rebalancing and ESG issues continuing to be key drivers. “Larger deals will remain tough to pull off due to increasing anti-trust and regulatory pushback. Instead, companies are more likely to pursue small to midsize deals, which are easier to complete than megadeals and lower risk in today’s difficult financing environment. But in the race to acquire - whatever the size of deal - due diligence that is faster, deeper and better focused, combined with a plan for successful integration, will prove even more critical in a volatile market.” M&A YEARLY ANALYSIS VOLUME (NUMBER) ALL DEALS

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