The number of companies across sectors discussing about merger and acquisition (M&A) opportunities were down during Q1 2022 compared to the same period last year. However, earnings call mentions have been on the uptrend since Q2 2020, highlighting a rise in optimism around M&A, reveals the company filing analytics database of GlobalData, a leading data and analytics company.
GlobalData’s report, ‘Company Filings Analytics Trends & Signals Q1 2022’, reveals that technology, banking & payments (B&P), construction sectors were more active than others in discussing M&A opportunities during the period.
Rinaldo Pereira, Business Fundamentals Analyst at GlobalData, comments: “Discussions in filings can be a signal for upcoming M&A and strategies despite the decrease in the number of companies. However, the decrease in count seems to be in line with corporates being uncertain about geopolitical conflicts and the COVID-19 pandemic that could affect deal activity. Additionally, inflationary pressures are also likely to affect M&A strategies.”
HSBC, Honeywell, Boston Scientific Corporation and Merck were some of the companies identified by the company filings analytics database during Q1 2022, which are seeking value-enhancing M&A opportunities in 2022. For B&P companies, digitalization and cybersecurity were among the top technology themes discussed around M&A opportunities, with fintech being a key industry theme.
In 2022 so far, special purpose acquisition companies (SPACs) are also targeting plethora of opportunities including space, cybersecurity, cloud, robotics, and biotechnology.
Pereira adds: “Q1 2022 earnings call transcripts highlight optimism towards M&A. Sentiment around M&A opportunities was nearly 3% higher in Q1 2022 over Q1 2021. Companies remain positive around focus growth areas with respect to technological acquisitions. The COVID-19 driven digital shift has caused companies to look at accretive acquisition opportunities for cloud and cybersecurity. Firms are also adding an ESG lens when looking at acquisitions.”
Aurojyoti Bose, Lead Analyst at GlobalData, says: “Although deal activity showcased a slight improvement in Q1 2022, many of the key global markets suffered setback due to the Russia-Ukraine conflict and resurging COVID-19 cases across several countries. The new COVID-19 variant may also hamper the global deal activity in the coming months.”
