Global deal-making activities, which had been languishing for a year now, are seeing green shoots. In the third quarter of 2023, signs of improvement were visible, with a buoy in the United States being the major driving factor.

Per the data from Dealogic, global M&A value stood at $717.4 billion in the June-September quarter. In the first quarter, the number stood at $601 billion, while in the second quarter it was $732.8 billion. On the other hand, in the first nine months of 2022, the global M&A value was almost $3 trillion.

Hence, going by the numbers, we see global deal-making activities are on the verge of making a sustained rebound. Top executives at major global deal-makers, including Morgan Stanley (MS Quick QuoteMS - Free Report) , Goldman Sachs (GS Quick QuoteGS - Free Report) and JPMorgan (JPM Quick QuoteJPM - Free Report) , have been expressing similar views.

Headwinds, including high-interest rates, increased antitrust scrutiny and a looming U.S. federal government shutdown, were the primary reasons behind the subdued M&A activity in the third quarter of 2023. Nonetheless, buyers with substantial available liquidity (including cash in hand) have started making a go after sizable targets.

In early September, at the Barclays Global Financial Services Conference, executives from MS, GS and JPM noted that global M&As have been seeing early signs of thawing on the back of a huge backlog of deals and signs of improving sentiments. Also, the lesser chance of the U.S. economy going into a recession in the near term seems to be helping the matter.

Further, Dan Simkowitz, the head of Investment Management at Morgan Stanley, said at the conference, “We're also seeing improved execution quality across the capital markets and M&A. And so I think that leads us to believe that 2024 should be meaningfully improved versus last year, and that we're in the midst of a sustainable recovery.”

Despite this optimism, challenges persist. While global M&A activities are gaining traction, high rates for longer periods and a tougher regulatory environment are expected to make a fast rebound tough.