Environmental, social and governance (ESG) was the key disruptive theme that drove the most mergers and acquisitions (M&A) activity globally and across sectors during the second quarter of 2023, research from GlobalData, Energy Monitor‘s parent company, shows.

The Thematic intelligence: Global M&A Deals in Q2 2023 – Top Themes by Sector report explores the themes that drove M&A activity in Q2 2023 across all sectors. It found that ESG drove 104 M&A deals worth a combined total of $145bn during the quarter.

ESG was also the top theme driving deals in the business and consumer services and the energy sectors – specifically, the environmental aspect of it.

Of this, GlobalData has noted: “There will be a greater focus on the ‘E’ component, with a shift from a voluntary regime to a mandatory one, driven by government mandates rather than consumer pressure. A host of new environmental laws are in the pipeline, as well as more state support and investment in clean energy technologies.”

Christopher Papadopoullos, senior analyst at GlobalData, commented: “As more governments push to decarbonise their economies, incumbent energy companies and miners are investing in renewable energy and the materials needed for energy transition.

“Decarbonisation is not just impacting industrial deal-making. Business and consumer services firms are looking to build capacity as more companies seek advisory services on their decarbonisation strategy amid increased regulation and greater state financial support for clean energy.”

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By GlobalData

The other top four themes driving M&A activity in Q2 were emerging economies as companies diversify into faster-growing markets; artificial intelligence as the technology increasingly becomes able to solve real-life problems; and supply chain disruption as organisations seek to stabilise following the shocks of Covid-19 pandemic, the semiconductor shortage and the Ukraine war.

Q2 2023 saw deals worth a total of $602bn concluded, up 28% from the $469bn of M&A deals globally in Q1 2023. The number of deals, however, fell from 8,275 deals in Q1 to 8,001 in Q2.

The basic materials sector saw the highest cumulative deals value in Q2, with 1,611 deals worth a total of $212bn. The sector also saw the third-largest single deal in Bunge’s $18bn acquisition of Viterra, driven by supply chain disruption. The largest single deal was Oneok’s $19bn acquisition of Magellan Midstream Partners in the energy sector, driven by the energy transition and the environmental aspect of ESG.