While the number of M&A deals have remained steady, the William Fry report suggests rising interest rates, high inflation and fears of a recession have all impacted the market.
The value of Irish M&A deals have fallen sharply this year due to the drop in global activity, according to a new report by William Fry.
The report claims the first six months of 2023 saw 177 M&A deals involving Irish businesses. This represents only a 2pc drop compared to last year, but the overall size of these deals has dropped significantly.
The total value of these deals was €5.2bn, a 58pc drop compared to the €12.4bn Ireland saw in the first half of 2022. William Fry said rising interest rates, high inflation and fears of a recession have all impacted confidence and made acquisitions more expensive.
The report suggests Ireland has been inevitably impacted by changes in the global market, though the country has managed to show “notable resilience” compared to others.
The overall shape of Ireland’s M&A deals appears to be in line with previous years, with the majority being in the “mid-market segment” – deals that are between €5m and €20m in value. These deals represented 97pc of Ireland’s M&A activity for the first half of the year.
But the higher end of the M&A market was quiet. There were only three deals worth more than €500m announced during the first half of the year, according to the report. The biggest deal was the acquisition of Irish pharma Amryt by Chiesi Farmaceutici for nearly $1.5bn.
Stephen Keogh, the head of corporate and M&A at William Fry Ireland, expects dealmaking in Ireland not to “slow to a halt”, as there is ongoing interest in various Irish sectors and opportunities for M&A within “a tougher economic environment”.
Some sectors appear to have benefited from the changing economy, as deals in the pharma, medical and biotech sectors accounted for 28pc of overall value this year, compared to 2pc during the same period last year.
“We expect reasonably healthy levels of Irish M&A activity in the second half of 2023, but no imminent return to the bumper volumes witnessed in the immediate aftermath of the Covid era,” Keogh said.
An earlier William Fry report suggests Ireland’s technology, media and telecoms sector accounted for 22pc of all M&A deals by volume last year, while pharma accounted for 12pc.
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