How Do Mergers & Acquisitions Differ Across Sectors?


Mergers and acquisitions take place across all sectors of the economy, with some sectors having more mergers and acquisitions than others. Mergers or acquisitions take place when two companies combine together, either in the form of an equal merger, or when one company takes over the other one.

In this article, we will be exploring 5 different sectors of the economy and how mergers and acquisitions affect them. Whether it be the healthcare industry with merger and acquisitions setting record highs or the technology industry with its ever growing and developing landscape, this article will cover it all. 

Technology Sector

The largest sector in merger and acquisitions is the technology sector. In 2022, there were a total of 2,589 transactions that were worth $612.6 billion. With that said, there was still a decline year-on-year for technology merger and acquisitions of about 11 percent.

There are several contributing factors to this decline, with one of the primary drivers being the heightened scrutiny from regulatory bodies, particularly in relation to concerns surrounding antitrust issues. Large technology companies are now facing more thorough examination, as authorities are increasingly focused on ensuring that mergers and acquisitions do not lead to monopolistic practices or harm competition. Consequently, this heightened scrutiny has resulted in longer approval processes and a more cautious approach to consolidation.

Furthermore, the tech sector is known for its rapid pace of innovation and frequent market disruptions. Consequently, companies often engage in M&A activities to reinforce their positions in emerging fields such as artificial intelligence, cybersecurity, and cloud computing. The pursuit of cutting-edge technology and intellectual property assets stands out as a significant driver of M&A within this industry.

Healthcare Sector

The second largest sector in M&A deals is the healthcare sector, with deals worth $254.7 billion USD, which is still a ways behind the technology sector. Additionally, the healthcare sector has seen a sharp increase in merger and acquisition deals since 2018 when the value of merger and acquisitions in the sector would jump from an average of just below $200 billion per year in 2017 to around $450 billion starting in 2018. This sharp increase in mergers and acquisitions has allowed the healthcare industry to cement its position as the second highest on this list.

That number did however fall after 2021 to under $200 billion in 2022, and then to $254.7 billion for 2023. Compared to 2021, it was a decline of 20%. However, that is not the largest decline in a sector on this list.

Industrials and Chemicals

The third largest M&A sector had the largest fall in deal value from 2021, being 50% in deal value and 20% in deal volume. However, the sector is still the third largest by deal value, and fourth in deal volume. In 2022, there were 1,060 deals in the industrials and chemicals sector and they were worth a collective $146.3 billion USD. 

While industrials and chemicals output, especially its close connection to consumer demand, remained impressively robust throughout 2022, dealmakers exhibited caution in response to a less optimistic economic outlook. 

Within the industrials and chemicals sector, companies often grapple with high fixed costs. This arises from the necessity for costly equipment, facilities, and ongoing maintenance to facilitate the production of products and components. Such a cost structure can render these companies vulnerable to the dual challenges of escalating expenses and diminishing demand.

Business Services

Interestingly, the business services sector saw a much higher amount of deals compared to value when ranked against other sectors in the U.S. When ranking sectors by the deal volume of 2022, the business services sectors ranked 3rd with 1,116 deals. However, it ranked 8th on the deal value list with all 1,116 deals being worth $74.7 billion. 

This phenomenon can be attributed to the sector’s diverse range of services, fragmented market landscape, strategic expansion focus, technology-driven innovations, and its adaptive response to evolving market dynamics, all contributing to a higher number of smaller-scale acquisitions aimed at specialization, market presence, and meeting changing client needs.

Real Estate

Real Estate would be a contrast of sorts to the Business Services sector when comparing the two charts, as it had a low deal volume of just 91 total deals, however the total value of those deals would surpass the Business Services deal value at $100.9 billion. It is interesting that in the real estate sector, the deals are much larger in size and there aren’t as many of them. Whereas in the Business sector, there are many deals however on average they are not that big comparatively. 

This intriguing disparity underscores the real estate sector’s preference for larger-scale transactions. Here, deals are characterized by substantial value, with fewer in number compared to the Business Services sector. While Business Services boasts a multitude of transactions, they tend to be smaller on average, whereas the real estate sector’s deals, although fewer, are notably larger in size, emphasizing the significance of individual transactions within the real estate landscape.

Wrapping It Up

We hope you found this article on the various sectors and how their M&A statistics differ, and that you now know a little bit more about the topic. If you would like to learn more about mergers and acquisitions across the different sectors of the economy, we recommend checking out this article

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