In 2022 the value of strategic M&A deals dropped to its lowest point in a decade, while the gap between buyer and seller valuations remained high. However, despite the tense environment some companies benefited from volatility to pursue their M&A goals.
A successful merger between United Technologies & Rockwell Collins made the world’s top aerospace and defense system manufacturing company. The $135 billion deal was a win-win situation for both sellers and buyers since it allowed them to expand their customer base and increase their revenue.
In another example, LSEG, the owner of Europe’s largest financial markets, has purchased a the US-based competitor NYSEG to make the world’s largest market data provider. This acquisition will allow LSEG to better serve its clients by offering them extensive trading tools, data, analytics, and risk management services across international financial markets.
The success of vertical M&A is evident in the $70-billion acquisition of Aetna by CVS Health, which transformed the landscape of healthcare by amalgamating health insurance and pharmacy services into one. The energy sector also saw an M&A vertical deal in the form of ONEOK’s acquisition of Magellan Midstream Partners L.P for an awe-inspiring $18.8 billion, which is expected transform the entire landscape of oil and gas infrastructure. In a similar way, the state-owned Chinese company ChemChina merged its rival Sinochem into the world’s biggest industrial chemicals conglomerate. This is an excellent illustration of how M&A can be used to benefit in times of uncertainty.