Light at the end of the tunnel: Q3’23 TMT M&A Trends

In Q3’23, the foreboding clouds hanging over the M&A market in the technology, media, and telecom (TMT) sector began to clear—a little. Overall deal value climbed 35 percent from Q2’23 even as deal volume fell 17 percent.

In the first uptick since Q4’22, technology deal value leaped from $31.6 billion to $54.4 billion on the back of Cisco’s $28 billion bid for cybersecurity firm Splunk, although deal volume continued to decline from 960 to 839. Transactions in the media subsector, where dual Hollywood strikes by writers and actors cast a long shadow, fell 31 percent from 389 in Q2’23 to 268, while deal value dropped 46 percent from $9.2 billion to $5 billion. Telecom deal count rose 12 percent from 50 to 56, but deal value fell 40 percent from $5.9 billion to $3.5 billion.

Notable M&A trends in TMT in Q3’23 included:

• More positive sentiment: Fears of more interest rate hikes and a recession started to dissipate.
• Return of a megadeal: Bigger deals, especially the $28 billion Cisco-Splunk transaction, may signal the start of a sustained upturn in deal making.
• Regulatory pressure: Antitrust regulators continue to be active, scrutinizing in particular acquisitions by large technology companies.

Taken together, these trends could justify guarded optimism for TMT deal makers. However, we believe the nascent rebound in M&A will probably build up slowly, given still-rich valuations of potential targets, high borrowing costs, and an unfavorable regulatory environment.

Download your copy of our comprehensive review of the TMT deal trends in Q3’23 and what to expect in Q4’23.