2022 has seen a record first half for ASX mergers and acquisitions. Here's the lowdown

Deals have hit new heights in Australia so far this year.

Projection of two hands being shaken on a deal.

Image source: Getty Images

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Key points

  • M&A activity has spiked in 2022, setting new records in several domains
  • Capital flows from overseas are especially strong, while healthcare is a star performer
  • Fees associated with M&A activity have also surged 78% over the comparable period 

While ASX equity and credit markets deal with one of the worst starts to the year on record, it's been an entirely different story over in investment banking land.

Mergers and acquisitions (M&A) activity has nudged past a number of records in the first half of 2022, according to data compiled by Refinitiv.

Fees alone are up 78% on the prior corresponding period, and deal volume was the highest on record.

Crunching the record numbers

M&A activity blew to new heights in the first half of 2022, according to data presented in the Australia Investment Banking Review First Half 2022 from Refinitiv.

There have been at least four deals announced so far above US$5 billion with a cumulative value of $52 billion, as of June 21.

Data compiled by Refinitiv showed it was a record period for Australia on many fronts.

Overall Australian involvement announced M&A activity amounted to US$103.5 billion in the first half of 2022, a 25.4% increase compared to the first half of last year, making it the highest first-half period since records began in 1980.

The ASX healthcare sector accounted for 23% market share of the deal-making activity by value and totalled US$24.2 billion.

This was underlined by the US$22.1 billion takeover bid for Ramsay Health Care Limited (ASX: RHC) by a consortium led by private equity giant KKR.

It is currently the biggest-ever healthcare deal in Australia, Refinitiv notes.

The energy and power sector followed with 16.6% market value, booking US$17.2 billion of deals, up 26.3% from H1 FY21.

What the report calls "high technology" saw the most number of deals, but captured 13.6% of deal market share.

"Based on preliminary data, Barclays currently leads the Australian involvement announced M&A league tables, with US$36.1 billion in related deal value capturing 34.9% market share," Refinitiv also said.

Inbound M&A activity is also up 74% from last year, primarily from capital flows from the US. Meanwhile, there are several deals still pending, with only two showing completed on the data provider's slide deck.

Nevertheless, it shows there's been a spike in deal-making in Australia at the top end of town, suggesting the outlook for Australia might be quite robust, all things considered.

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ramsay Health Care Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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