Having declined throughout 2022, global merger and acquisitions (M&A) activity is likely to increase again in the second half of this year, according to PwC's 2023 Global M&A Industry Trends Outlook.
Global deal activity remains clouded against the backdrop of macroeconomic volatility, rising interest rates, a steep decline in equity valuations, geopolitical tensions and supply chain disruptions.
Nonetheless, three in five CEOs globally - 60% - told PwC said they are not planning to delay deal making in 2023.
In Ireland, that figure is slightly higher at 62%.
M&A volumes and values declined in 2022 from a record high of 65,000 deals in 2021, with the falloff in activity intensifying in the second half of the year.
"With strong fiscal returns, continued foreign direct investment flows, a thriving export sector, high employment levels and indications that inflation may be easing, there are solid reasons why six out of ten Irish CEOs are not planning to delay M&A deals in 2023," Paul Tuite, Leader at PwC Ireland Deals Practice, said.
"M&A tends to slow during times of uncertainty or market volatility - but those can be precisely the times when valuations become more attractive and opportunity knocks," he explained.
"A reset in valuations, lessened competition for deals and new assets coming to market - including potentially from distressed situations - present real opportunities for buyers to achieve better returns and even outsized growth. Provided companies have well-thought-out strategies and access to capital to make transformational deals, the current market can provide an opportune moment for M&A plays," Mr Tuite concluded.
Despite recent layoffs in the tech sector, software deals are expected to continue to dominate the sector.
In 2022, software accounted for over two-thirds of deal activity in the tech industry as well as three-quarters of deal values.
Other areas which will likely be hot spots for activity in 2023 include telecoms, the metaverse and video games, PwC concludes.
Financial services, consumer markets, automotive and health are all expected to provide scope for merger and acquisitions in the year ahead.
