Global mergers and acquisitions (M&A) deals have shown a remarkable quarter-on-quarter (QoQ) rebound, surging by 28% from $469 billion during the first quarter (Q1) of 2023 to reach $602 billion during the second quarter (Q2) of 2023. After four consecutive quarters of decline, this growth signals a resurgence in deal-making activities driven by environmental, social, and governance (ESG) theme, according to GlobalData, a leading data and analytics company.

GlobalData’s latest report, “Mergers and Acquisitions Deals by Top Themes and Industries in Q2 2023 – Thematic Intelligence,” reveals that mega-deals (≥ $1 billion) also saw a significant 46% QoQ jump from 85 to 124 during the period.

Priya Toppo, Thematic Intelligence Analyst at GlobalData, comments: “North America continued to lead M&A deal activity in Q2 2023. It accounted for 3,185 deals worth $291 billion, making it the most active region.”

However, a downward trend in M&A deal activity was observed in APAC excluding China, and China regions on both a year-on-year and quarter-on-quarter basis. This indicates that the investors are more cautious towards this region.

ESG was the most prominent theme driving the M&A activity during Q2 2023 with a total of 104 deals worth $145 billion.

Toppo explains: “This thematic emphasis reflects a growing awareness among corporations about the impact of their actions on society and the environment, and it highlights investors’ increasing focus on companies that prioritize ESG principles.”

As businesses seek to align themselves with societal and environmental goals, GlobalData expects the ESG theme likely to continue driving M&A strategies in the foreseeable future.

Toppo concludes: “Despite the recovery in global M&A activity in Q2 2023, the outlook for H2 2023 remains relatively sluggish, with likely further increases in interest rates and the prospects of mild recessions in several key markets. However, the M&A market will likely rebound as we head into 2024, as acquisitions remain a key element of corporate strategy.”