Fears of looming inflation have cut in to second-quarter M&A activity as boardrooms reconsider their chances on new deals. According to data from Dealogic, global mergers and acquisitions have hit a dry spell, with deals down 25.5% year-on-year to $1 trillion in Q2.1 M&A activity in the US specifically is down 40%, while the Asia-Pacific region has seen a slide of 10%. The only region in an upswing is Europe, with an activity increase of 6.5% owed in large part to major private equity deals such as Blackstone’s €58 billion bid for Atlantia. The downturn comes amid growing fears of inflation and widespread disruption caused by the Russian invasion of Ukraine. On the back of the invasion and ensuing compliance with sanctions, there has been a renewed surge of multinational organisations agreeing to sell their assets in Russia or hand them over to local managers.2 Companies divesting their assets include several that have come under fire for choosing not to do so in the weeks following the beginning of the invasion, including Michelin, Renault, Shell, Brunel, Whirlpool and Pizza Hut. Activity continues in the tech sector with Siemens’ $1.6 billion acquisition of US software firm Brightly3, Kaseya’s announcement of having finalised its $6.2 billion acquisition of cybersecurity firm Datto4 and confirmation that, following months of turmoil, Zendesk has been bought by activist investors Jana Partners for $10.2 billion, well below the initial $17 billion offer made in February.5 Elsewhere in the sector, Ericsson has paused its planned $6.2 billion acquisition of Vonage to the end of the July due to a pending investigation by the SEC.6 Finally, IPOs have seen their own downturn, with no sizeable issues imminent. Only 47 companies were found to have listed via traditional IPO as of 17 June7, with a combined value of $4.6 billion – representing a dive of 74% compared to the same period in 2021, where 180 companies went public. Deals valued at over $100 million appear to be largely on pause. What’sHappening in theWorldof M&As and IPOs? 74 WWW.LAWYER-MONTHLY.COM JUL 2022 1https://www.pymnts.com/acquisitions/2022/looming-recession-curbs-global-ma-activity-as-us-activity-slows-40-pct/ 2https://www.reuters.com/business/companies-sell-their-businesses-russia-2022-06-17/ 3https://www.bloomberg.com/news/articles/2022-06-27/siemens-to-buy-buildings-software-firm-brightly-for-1-6-billion 4https://www.csoonline.com/article/3664850/kaseya-closes-6-2-billion-datto-deal-vows-to-cut-prices.html 5https://www.cnbc.com/2022/06/24/zendesk-to-be-acquired-by-investor-group-for-10point2-billion.html 6https://www.reuters.com/markets/europe/ericssons-62-bln-vonage-takeover-delayed-over-us-review-2022-06-28/ 7https://www.barrons.com/articles/ipos-sec-file-delay-markets-stabilize-51655517418
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