In 2022 the value of strategic M&A dropped to its lowest point in a decade. The gap between buyer’s and seller’s valuations remained large. However, despite the difficult environment, some businesses took advantage of the market’s fluctuations to pursue their M&A goals.
One example was the successful merger of United Technologies and Rockwell Collins, creating the world’s most advanced defense and aerospace systems manufacturing company. The deal valued at $135 billion, and was a win-win for the sellers and buyers, allowing them to expand their customer base as well as increase revenue.
In a different instance, LSEG (the owner of Europe’s biggest financial markets) bought a competitor from the US NYSEG in order to form the world’s biggest market data provider. This acquisition will help LSEG better serve its customers by providing them with complete market data trading tools, analytics and analytics, in addition to risk management services, across all international financial markets.
The success of vertical M&A can also be seen in the acquisition of Aetna at a cost of $70-billion by CVS Health. This deal transformed the healthcare sector by combining health and pharmacy insurance services into one company. The energy sector also saw a vertical deal in the form of ONEOK’s purchase of Magellan Midstream Partners L.P for an awe-inspiring $18.8 billion, which is expected to reshape the entire landscape of oil and gas infrastructure. In a similar way, the state-owned Chinese company ChemChina has merged with its rival Sinochem into the world’s biggest industrial chemicals conglomerate. This is a clear indication of the importance of using M&A deals M&A in times of uncertainty and change.
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