IPOs continue to see weak returns worldwide, but M&A appetites prove more robust than first believed. New survey data from Datasite revealed that M&A activity in the UK and EMEA region has not been cowed by geopolitical uncertainties. Though UK dealmakers rated the Russian invasion of Ukraine (33%) and inflation and the cost of capital (19%) as the two top reasons why M&A deals may fall apart in 2022, deals have not slowed – in fact, they have shown a 14% increase year-on-year in the EMEA region for the first five months of 2022. Asset sales, purchases and mergers are especially high among this figure. Most UK M&A professionals surveyed expected to see the biggest increase in M&A activity in debt financing (50%) and transformational acquisitions or mergers (43%). Further, 61% expected to do the most cross-border deals with the US, followed by deals between the UK and the EMEA region (40%). 47% also anticipated a greater focus on technology to boost productivity in response to the Great Resignation hitting the M&A talent market, with 75% predicting inflation to increase M&A salaries by at least 5-7% – if not higher – by the end of the year. Further analysis by EY bore out the picture of the market’s resilience, noting that India had seen an especially active start to the year with deals totaling $128 billion in value; a 215% increase from its average during the 20152019 deal cycle. Activity in tech M&A has already seen an acceleration this year in spite of flagging global economies. The UK emerged as the top country for tech deal value , with $1.32 billion worth of deals in June. The greatest of these was Digital 9 Infrastructure’s $563.7 million acquisition of a 48.02% equity stake in Arqiva which, together with the other four top tech deals of the month, accounted for more than 75% of Europe’s overall deal value in the sector. In south-east Asia, Thai Life’s Bangkok IPO – the largest in the region this year – completed at 0.6% below its initial offer , a disappointment for some who had bought into its 37.1 billion baht ($1 billion) debut and further evidence of the global IPO slump prompted by inflation, a surge in interest rates and equity market volatility. There is significant IPO news looming on the horizon, however, as Saudi crown prince Mohammed bin Salman announced plans for an $80 billion IPO fund for the country’s Neom “smart city” megaproject. Prospective investors will need to wait until 2024 for a chance to become involved in bringing the five-year-old project back on track following its previous setbacks. - What’sHappening in theWorldof M&As and IPOs? 68 WWW.LAWYER-MONTHLY.COM AUG 2022 1 https://www.datasite.com/us/en/resources/insights/visualization/infographics/2h-2022-m-a-outlook.html 2 https://www.ey.com/en_gl/news/2022/07/ma-activity-remains-resilient-in-2022-but-further-shocks-could-derail-outlook 3 https://www.verdict.co.uk/technology-industry-ma-deals-total-2bn-in-europe-in-june-2022/ 4 https://www.bloomberg.com/news/articles/2022-07-25/thai-life-insurance-rises-in-biggest-bangkok-ipo-debut-this-year 5 https://www.arabianbusiness.com/money/corporate/capital-markets/saudi-arabia-plans-ipo-of-500-billion-project-neom-by-2024
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