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Analysis

2023 M&A Trends Survey: Navigating Uncertainty

How to navigate dealmaking amid M&A market volatility

As transactions remain essential for growth in most industries, the players who come out ahead from a period of volatility and uncertainty will have one trait in common: boldness. This report captures the sentiment and insights from corporate and private equity firms in the M&A market and projects M&A trends for the next 12 months.

Where is the uncertainty in M&A markets coming from?

  • Economic headwinds include Inflation, which rose to a high of 9.1% in June 2022, has lessened but flattened (6.0% as of February 2023).1 That has given companies better pricing power, but it has also muted demand. Financing costs may continue to rise.
  • Tax policy may be more favorable for dealmakers in 2023 and 2024. With a changed political dynamic in Washington, DC, the threat of capital gains tax increases may have receded.
  • Talent shortages, with low unemployment in recent months,2 have challenged some sectors and organizations more than others. More recently, though, there have been waves of layoffs spreading from big tech to financial services and manufacturing.3 Navigating the new workplace, with hybrid work arrangements and increasingly activist employees, adds an extra challenge to restructuring and is a wild-card factor for potential deals.
  • Other external factors, such as geopolitical risks in Europe, Asia, and elsewhere; increased disruptions to normal operations, supply chains, and economies; and new more transmissible virus strains have continued to emerge, though in most cases are less harmful and disruptive than we saw in 2020.
2023 M&A Trends Survey: Navigating Uncertainty

Five key findings on M&A market trends

Next steps for this research

This publication is the first of several envisioned products that will make use of data from Deloitte's 2023 M&A Trends Survey. Readers may look forward to more in-depth data releases, focused spotlights on specific industries, and detailed comparisons between corporate and private equity perspectives.

The authors of this publication from Deloitte’s Mergers, Acquisitions and Restructuring Services practice are available to carry these and other conversations further. The data is the beginning, not the end, of the insights that can drive effective planning, dealmaking, and value creation. And every case is worth its own discussion—because no two are alike. In the unique M&A environment we’ve described, every company has a path worth exploring.

About the survey

Between October 25 and November 11, 2022, a Deloitte survey conducted by OnResearch, a market research firm, polled precisely 1,400 executives—1,100 at US-headquartered corporations and 300 at domestic-based private equity firms—to gauge their expectations for M&A activity in the upcoming 12 months, as well as their experiences with recent transactions.

All survey participants work either for private or public companies with revenues in excess of $250 million, or private equity firms. Approximately 75% of the corporate respondents represented firms with more than $1 billion in revenues. The participants hold senior ranks (vice president, managing director level, or higher) at the corporations. Most of the respondents (86%, or 1,206) sit within the C-suite. All respondents indicated that they are involved in M&A activity. The corporate respondents represent a variety of industries, including technology, consumer, energy, financial services, and life sciences. The majority of corporate respondents (61%) work for privately held companies. The private equity respondents are with firms that manage a variety of differently sized primary funds: 42% manage funds in the $3 billion and greater range, up 10% from last year; and 8% manage funds under $500 million.

End notes

1 Gabriel T. Rubin and Nick Timiraos, “U.S. Inflation Cooled in February as Fed Confronts Bank Failures,” Wall Street Journal, March 14, 2023.
2 David Harrison, “Unemployment falls to 3.4%, lowest in 53 years, jobs report shows,” Wall Street Journal, February 3, 2023; US Bureau of Labor Statistics, “Civilian unemployment rate, seasonally adjusted,” February 3, 2023.
3 Chip Cutter and Theo Francis, “Corporate layoffs spread beyond high-growth tech giants,” Wall Street Journal, January 26, 2023; Bethany Biron, Samantha Delouya, and Lakshmi Varanasi, “Amazon is slashing 9,000 more workers amid a layoff wave that has expanded past tech to include bellwethers like Dow and 3M. Here’s the full list of major US companies making cuts in 2023,” Business Insider, March 23, 2023.
4 From interviews with Deloitte Mergers, Acquisitions, and Restructuring Services (MARS) partners, principals, and managing directors, conducted by Barry Winer, MARS head of research, 2023.
5 Carleton English, “M&A is slowing as financing costs tick higher,” Barron’s, November 11, 2022; ; Wall Street Journal, “Financing dries up on Wall Street; Mergers, stock and bond offerings slowed in October to lowest level in over a decade,” November 7, 2022.
6 PitchBook, 2022 annual US PE breakdown, January 12, 2023, p. 10.

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