The value of corporate deals signed off last year dropped away from record highs after central banks increased interest rates to tame inflation.
The global value of mergers and acquisitions fell by 36 per cent from a record $5.9 trillion to $3.8 trillion in 2022, according to research by Bain & Company.
The decline took place largely in the second half of the year after the US Federal Reserve’s increase in rates on June 16 “put a chill on the deal market,” Bain said. The increases came sooner than expected and were mirrored by central banks in other jurisdictions.
Bain said: “Dealmakers across the globe suddenly confronted with an unfamiliar unknown — namely, the cost and availability of capital — amid a weakening economic environment.”
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