A recently released report suggests the gloom surrounding mergers and acquisitions could clear by the end of the year, Inc. reports.
M&A proposals have taken a hit because of inflation, with M&A deal volume dropping some 17% last year while the Federal Reserve hiked rates to a two-decade high of 5.5% last summer.
The sector should see an upswing of 20% in deal volume this year, according to the EY-Parthenon Deal Barometer, which parses various metrics, such as GDP growth, interest rates and corporate profits, to indicate where economic activity is headed. Some $796 billion worth of new deals were announced in the first quarter alone, according to the report.
Still, not all deals are making it to closing. JetBlue, for example, failed in its bid to purchase low-cost carrier Spirit Airlines for $3.8 billion—the deal was blocked by a federal judge in March.
Chevron’s proposed takeover of oil producer Hess Energy for $53 billion worth of stock has also hit snags, as independent advisers have urged Hess’ board to vote against the deal.
