M&A Year in Review: 2022 Marched in Like a Lion, Out Like a Lamb

Despite the precipitous drop in M&A activity during the second half of 2022, many law firms kept busy with new deals during Q4. From geopolitical turmoil to rapidly increasing interest rates, companies’ appetites for acquisitions cooled – but not without many deals proceeding nonetheless. Matterhorn’s M&A database tracks publicly-announced deals over $25 million in value, harnessing both AI and attorneys to digest the granular deal points of each transaction to allow for comparisons across industries, specific deal terms, and both legal and financial advisors.

While the approximately the same number of deals closed in Q4 compared to Q3, the average deal sized dropped by approximately 18%.

The blockbuster deal of the quarter was the grocery mega merger between The Kroger Co. and Albertsons Companies, Inc. A whooping five law firms advised on the acquisition, and likely for good reason: the deal has elicited a firestorm of pushback on multiple fronts. At nearly three times the size of the next largest deal, the deal crowned all five of the firms on the Q4 league table.

The league table is host to new names typically not found in the top 5 of other quarters. Missing are the usual faces such as Wachtell, Latham, and Skadden, each of which advised on far fewer deals than usual this quarter.

Weil, Gotshal & Manges LLP led the pack with two deals announced, valued at $31 billion. White & Case advised on 6 deals, valued at 30.2 billion, nearly landing the top spot this quarter. Finally, because the Kroger/Albertsons deal was so relatively large, it led to a highly irregular three way tie for 3rd, 4th, and 5th places: Debevoise & Plimpton, Arnold & Porter Kaye Scholer, and Jenner & Block.  

Analyzing the industry breakdown of deals this quarter, it is especially noteworthy that there was a lack of technology, media, and telecom deals. TMT typically accounts for a sizable portion of the pie but typically robust technology M&A languished this quarter.  

Even for these deals announced, there is the very real risk they will never close. Increased regulatory scrutiny from U.S. regulators as well as those abroad have derailed companies’ plans in the past, and we will likely see more regulatory action in 2023.