By Favour Nnabugwu
A total of Merger & Acquistion, M&A, 242 deals were concluded globally by the end of June 2022 against 197 a year earlier, increasing by 23 per cent. After a slowdown in 2021 according to Atlas Magazine
M&A operations have also picked up in the Middle East and Africa with 16 deals signed in the first half of 2022 compared to 12 in the same period of 202.
In Africa, most buyers are from the continent: four from Côte d’Ivoire, three from South Africa and two from Kenya. In Asia Pacific, the number of completed transactions jumped from 24 to 27 during the same period.
According to Clyde & Co, insurers have focused on external growth opportunities to address the severe economic pressures of inflation, rising energy costs and recession.
The number of deals valued at more than $1 billion remained relatively stable at 13 in the first half of 2022 compared to 14 a year earlier.
With a value of $7.7 billion, the acquisition of the US insurer Athene Holding by Apollo Global Management is considered the largest transaction of the year so far. At the beginning of 2022, the M&A market seemed to be building on the momentum of 2021.
The continuation of a favorable environment should logically lead to the same results: significant resources, high level of available capital, good financial health, still low debt costs, willingness of strategic players to accelerate their transformation and search for new growth levers.
Unfortunately, the outbreak of a serious geopolitical crisis in February 2022 has strained the entire global economic sphere. As a result, the M&A market sustained a sharp 29 per cent drop in total deal value in the first quarter of 2022.
According to Dealogic’s data, M&A transactions account for a volume of $1.010 billion compared to $1.430 billion, at the end of March 2021. The decline is due to market volatility related to Russia’s invasion of Ukraine and disruption of supply chains. Notwithstanding this difficult environment, specialists expect M&A activity in the insurance market to keep up the momentum in 2022, with the number of transactions expected to exceed 420 worldwide.