Intelligize® Report Shows M&A Deals by SEC Registrants Falling in 2022, Uncertainty Lingering in 2023
Analysis Points to Regulatory Scrutiny, Economic Fears as Factors in Decline
NEW YORK – May 9, 2023 – A deteriorating environment in Mergers & Acquisitions sent deals by SEC registrants spiraling downward in 2022, according to a new report from Intelligize® based on data available on the research platform. The Intelligize M&A Report also suggested a rebound in M&A activity may not occur immediately, as a number of factors responsible for the downturn last year — increased regulatory scrutiny, a gloomy economic outlook, tightening in the equity and credit markets, and geopolitical tensions — persist into 2023.
The report, which studied registrants’ deal-related disclosures and SEC comment letters on the Intelligize platform, as well as material from different federal regulators, revealed a sharp decline in the number of M&A deals announced by SEC registrants in 2022. Meanwhile, the number of terminated M&A deals nearly doubled during the same period. The report also analyzed data on special purpose acquisition companies (SPACs), which began attracting heavy regulatory scrutiny in 2021 that may have foretold trouble ahead in the M&A markets.
“The Intelligize M&A Report demonstrates the power of our platform to quantify market-wide trends as well as reveal insights on specific companies and deals,” said Scott Mirbagheri, analyst and author of the report. “Our report shows not only the steep drop in M&A activity by SEC registrants in 2022, but also the factors behind it. Regulatory concerns sank multiple deals, while additional factors spelling trouble for the M&A space included difficulties in obtaining attractive financing; geopolitical uncertainty, particularly in Ukraine and China; and a negative economic outlook.”
In addition to its data-driven analysis, The Intelligize M&A Report examines troubled M&A deals from 2021 and 2022 to illustrate the market’s challenges. They include the following deals :
- NVIDIA and Arm Limited, which was set to be the largest semiconductor chip deal in history before it fell apart in the face of regulatory challenge.
- Lockheed Martin and Aerojet, a defense industry deal that became the subject of a lawsuit by the FTC more than a year after its announcement because of antitrust concerns.
- Pershing Square Tontine Holdings Ltd., a high-profile SPAC that exemplified the sector’s ongoing issues.
Additional Report Takeaways
- M&A deals involving SPACs also fell in 2022, mirroring the decline in overall M&A activity, while SPAC liquidations grew steadily throughout 2022.
- The number of SPAC definitive proxy statements seeking stockholder approval to extend the date by which they are required to consummate a business combination notably increased in 2022.
- An analysis of deal-related comment letters sent by the SEC to companies for the 12 months ended March 31, 2023, found accounting issues, risk to investors, and CFIUS-prohibited foreign involvement in a deal to be among the issues of focus for the regulator.
About LexisNexis Legal & Professional
LexisNexis Legal & Professional® provides legal, regulatory, and business information and analytics that help customers increase their productivity, improve decision-making, achieve better outcomes, and advance the rule of law around the world. As a digital pioneer, the company was the first to bring legal and business information online with its Lexis® and Nexis® services. LexisNexis Legal & Professional, which serves customers in more than 150 countries with 11,300 employees worldwide, is part of RELX, a global provider of information-based analytics and decision tools for professional and business customers.
Intelligize is the leading provider of best-in-class content, exclusive news collections, regulatory insights, and powerful analytical tools for compliance, transactional and financial reporting professionals. Intelligize offers a web-based research platform that ensures law firms, accounting firms, corporations, and other organizations stay compliant with government regulations, build stronger deals and agreements, and deliver value to their shareholders and clients.
Headquartered in New York City, Intelligize serves Fortune 500 companies, including Starbucks, IBM, Microsoft, Verizon and Walmart, as well as many of the top global law and accounting firms.
For more information, visit www.intelligize.com