Global M&A deals value in TMT sector drops by 33%

The M&A outlook for the sector remains uncertain due to rising interest rates and volatile markets.

GlobalData has revealed that the total value of mergers and acquisitions (M&A) deals in the technology, media, and telecom (TMT) industry fell by 33% year-on-year (YoY) in 2022. The data indicated that the value dropped from $1,261b in 2021 to $841b in 2022.

GlobalData conducted an analysis, revealing that "cloud" and "internet advertising" were the most significant themes driving the 100 highest-value deals in the TMT sector. The company's latest report, titled "Tech, Media and Telecom (TMT) Industry Mergers and Acquisitions Deals by Top Themes in 2022 - Thematic Intelligence," disclosed that the TMT sector M&A market recorded 124 deals worth $1b or more in 2022, down from 269 such deals in 2021.

Priya Toppo, Thematic Intelligence Analyst at GlobalData, explained that themes play a vital role in influencing businesses and corporations today and in the future. Toppo emphasized that companies that invest in the right themes would succeed, while those who ignore important themes would fail.

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"The 'cloud' theme, which is now the dominant model for delivering and maintaining enterprise IT resources, drove $2.1t worth of M&A deal value from the top 100 big deals announced in 2022," Toppo revealed. She further mentioned that big cloud deals announced in 2022 were Broadcom's acquisition of Vmware for $69b and Evergreen Coast Capital and Vista Equity Partners' acquisition of Citrix Systems for $16.5b.

According to the report, the "internet advertising" theme drove $1.2b worth of the top 100 big deals. The internet advertising industry is highly contested, with several tech giants and pure-play vendors vying for market share.

The most significant internet advertising deal in 2022 was Atoll Bidco's (Atairos) acquisition of Ocean Outdoor for $580m. Other significant thematic drivers included "cybersecurity," "big data," "e-commerce," "digital media," and "social media."

Toppo concluded by stating that after a significant increase in both deal value and deal volume in 2021, this year, deal activity significantly fell. She noted that the decline was most pronounced in the last quarter of 2022, which saw only 2,384 deals worth $94b.

Toppo predicts that the TMT sector M&A outlook remains uncertain, with rising interest rates, volatile markets, and an economic slowdown likely to continue to depress the deal activity in the first half of the year.

The report by GlobalData is significant for business professionals in the technology, media, and telecom industries as it highlights crucial themes that could shape the future of the sector. It also provides valuable insight into the current state of the M&A market, indicating the impact of economic factors, such as rising interest rates and volatile markets.