By all accounts, 2021 was an unstoppable year for mergers and acquisitions, with over $5.1 trillion worth of transactions being completed. According to a KMPG study, over 60% of global M&A was U.S.-based, with a record-breaking $2.9 trillion in transactions being recorded. Cross-border transactions shattered records with $2.1 trillion in deals. While several megadeals boosted numbers, M&A volume significantly increased, in part, due to private equity and family office investment and new models of financing, specifically SPACs. An abundance of capital and lower interest rates fueled M&A projections for 2022 but the reality has been quite different.

According to Refinitiv, deal values declined by 21% compared to the first half of 2021, yet volume remained strong. Supply chain issues, inflation, the conflict in Ukraine, Russia’s decision to halt gas supplies, rising interest rates, a volatile stock market and more have blended to create a tumultuous first half of the year for businesses looking to buy or sell. These economic fundamentals and headwinds have produced a multiplicative and layering effect that further places a strain on M&A dealmaking.