Rising market uncertainties caused a decline in global deal activity, reaching a total of 4,988 globally announced during February 2022, representing 16.4% over 5,963 deals announced during the previous month, according to GlobalData, a leading data and analytics company.
Based on an analysis of GlobalData’s ‘Financial Deals Database’, all deal types under coverage were affected and most regions experienced subdued deal activity in February 2022. These declines could be traced to the tensions of the Russia-Ukraine crisis that appears to have rippled dire effects on market predictability in other countries.
Aurojyoti Bose, Lead Analyst at GlobalData, said: “Several key global markets experienced a downturn in deal activities amid ongoing market uncertainty. These uncertainties are expected to continue in the coming months due to the current geopolitical situations.”
In February 2022, North America accounted for the highest share of deal activity but deal volume declined significantly by 22.6%. Akin to North America, Europe, Asia-Pacific and South and Central America regions also witnessed a decline in deal volume, while the Middle East and Africa was the only region to witness an improvement in deal volume.
According to GlobalData, deal activity witnessed a decline in many of the key markets in February compared to that of January 2022 such as the US (by 25.9%), China (39.3%), the UK (3.3%), India (7.7%), Germany (1.7%), South Korea (23%) and France (24.5%). However, deal activity grew in markets such as Canada, Japan, Australia, Singapore, Sweden and Brazil.
“All the deal types under coverage have experienced a downturn in deal volume in February compared to the previous month. The number of private equity, venture financing and mergers and acquisitions (M&A) deals decreased by 26%, 6.1% and 22.4%, respectively, in February compared to the previous month.”Aurojyoti Bose, Lead Analyst at GlobalData
Drawing Comparisons for Deal Activity in Previous Months
For January 2022, the North America region accounted for the highest share of global deal activity, with a 45.1% share. However, it witnessed decline in deal volume by 10.3%, compared to December 2021. North America was followed by the Asia-Pacific region (with 26% share), Europe (23.5%), Middle East and Africa (3.3%), and South and Central America (2.2%).
Considering the share of key markets that experienced a decline in deal activity in January 2022, the US saw a drop of 9.6%, China (29.5%), Canada (19.6%), India (21.2%), the UK (20.1%) and Germany (26.6%), among others.
Comparing deal activity from December 2021 to February 2022, deal activity was the highest on a year-on-year basis in December 2021, which notes that both global deal value and volume saw year-on-year growth in the month. For the 2021 full year, deal activity saw a 26.7% rise in deal volume, increasing from 56,279 deals in 2020 to 71,282 in 2021, and a 49.1% rise in deal value, increasing from US$3.1 trillion in 2020 to US$4.7 trillion in 2021.
Again, North America retained its leading share, accounting for 44.3% of global deal activity, while also experiencing a 32.8% rise in deal volume on a year-on-year basis—from 23,621 in 2020 to 31,366 in 2021. The Asia-Pacific, Europe, Middle East and Africa, and South and Central America regions also saw improvements in deal volume, by a respective 16.8%, 25.1%, 29.8% and 40.2%.