M&A Risk in Review 1H 2022

From increased investment in technology and financial due diligence, to the growing prominence of ESG standards, Aon’s M&A Risk in Review 1H 2022 (in association with Mergermarket) highlights emerging trends for investors trying to navigate uncertainties related to geopolitics, regulation and pandemic-related disruptions.

In our latest report, we explore these dynamics in detail including investors’ expectations for global M&A over the next 12 months, standout sectors, key risks and mitigation strategies.

Key Asia Pacific Findings

• More than half of dealmakers identify the Asia Pacific region (excluding Japan) as providing the most supportive environment for M&A over the next 12 months. 54% cite it as likely to be the number one market in the year ahead, with a further 20% regarding it as the second most attractive.
• Average enterprise values on deals with M&A insurance products increased in Asia, with the average deal having an enterprise value of $516 million, up 157% on 2020.
• In Australia and New Zealand, Technology is the most active sector for use of warranty & indemnity insurance, featuring in 38% of deals.

Key Global Findings

• 70% of respondents cite technology, media and telecoms as the most prolific sector in terms of expected dealmaking over the next 12 months. At the other end of the spectrum, 54% believe M&A will be least prolific in the energy, mining and utilities space.
• The vast majority of respondents (90%) predict an increase in scrutiny of deals for environmental, social & governance (ESG) implications over the next three years; almost half (48%) believe the increase will be significant.
• Amid ongoing COVID-19 vaccine roll-outs and continued easing of pandemic restrictions in multiple economies, many respondents are amending their M&A strategies to include more alternative investments (38%), as well as increasing the size of deals they are undertaking (36%).

The M&A Risk in Review 1H 2022 report suggests that last year’s resurgence of M&A can be sustained, with dealmakers looking forward to further transactions as they exploit recovering global growth and pursue digital transformation. The outlook looks especially promising for M&A in the APAC region.