In 2022, the value of strategic M&A deals dropped to the lowest level in a decade, while the gap between seller and buyer valuations remained wide. However, despite the difficult environment some businesses took advantage of the market’s fluctuations to pursue their M&A goals.
A successful merger between United Technologies & Rockwell Collins has created the world’s most renowned manufacturing of aerospace and defense systems company. The $135 billion deal was a win-win for both sellers and buyers since it allowed them to expand their client base and boost their revenue.
In a second instance, LSEG, the owner of Europe’s largest financial markets, has purchased a US-based competitor NYSEG to create the world’s largest global market data provider. This acquisition will allow LSEG to better serve its customers by offering them extensive data, trading tools, analytics, and risk management services across international financial markets.
The success of vertical M&A can also be seen in the acquisition of Aetna for $70-billion by CVS Health. This deal changed the face of healthcare by combining pharmacy and health insurance into one. The energy industry also witnessed a vertical deal in the form of ONEOK’s acquisition Magellan Midstream Partners L.P for an astounding $18.8 billion that is expected transform the landscape of infrastructure for oil and gas. In the same way, the state-owned Chinese chemical company ChemChina has merged with its rival Sinochem to become the world’s biggest industrial chemicals conglomerate. This is a great illustration of how M&A can be leveraged in times of uncertainty.
