In 2023, the global mergers and acquisitions (M&A) market experienced its second weakest year in a decade, with total transaction value reaching approximately $3 trillion, marking a 15.8% decrease from 2022. This slowdown is less severe than the more pronounced decline of 23.4% in the previous year, suggesting that the worst may be behind us. Despite the lowest transaction value since 2013, excluding the global lockdown in 2020, the number of M&A deals remained high, with over 40,200 transactions announced or completed in 2023, the third-highest total ever recorded.

The total value of M&A transactions decreased by 35.5% from the peak in 2021. Still, a potential recovery is expected shortly, especially with the anticipated easing of interest rates by the Federal Reserve starting in March 2024. In 2023, cross-border M&A deal flow between North America and Europe continued to favor the latter for the seventh consecutive year, with a net value of $24.3 billion and a gross value of $211.6 billion.

Regarding transaction valuations, the median EV/EBITDA multiple for M&A transactions announced or closed in 2023 was 9.3x, a modest improvement from the 8.9x recorded in 2022. This indicates a stabilization of transaction multiples in North America and Europe. However, the M&A landscape in North America in the fourth quarter of 2023 presented a mixed picture due to ongoing macroeconomic challenges despite a notable increase in transaction value, primarily in the energy sector.

The top 10 M&A deals in North America in the fourth quarter totaled $215.7 billion, a significant increase of 160.5% from the previous quarter, primarily driven by two significant transactions in the energy sector. Nonetheless, for 2023, the total value of M&A transactions reached $1,691.8 billion, down 13.4% year-over-year, due to a confluence of factors, including tighter monetary policies, diverging valuation expectations between buyers and sellers, and heightened geopolitical tensions.

Globally, government agencies have strengthened their competition policies by introducing new merger guidelines in the United States and Europe. This could have significant implications for future M&A operations, particularly concerning concentration control and competition in the airline industry.