Interactive
Figure 1
Telecom M&A deal value fell 41% in the first half of 2023
Figure 2
Infrastructure deals accounted for about 50% of deal value in the first half of the year
Figure 3
Infrastructure and full asset divestment deals account for about 50% of value since 2017
Facing unprecedented industry transformation and emerging competitive threats, many telecommunications companies are turning to mergers and acquisitions to add new capabilities and evolve their businesses for the next era. At the same time, in the biggest industry reset since deregulation, the integrated telco is giving way to more disaggregated, narrowly focused business models. We’re tracking telecom M&A activity around the world, and we’ll publish the latest developments in this dashboard each quarter.
Here are some of the key takeaways through the second quarter of 2023:
- Deal value down: Continuing a decline that began last year, telecom M&A reached just $33 billion in deal value in the first half of the year, down 40% from the same period in 2022 (see Figure 1). However, M&A activity picked up on a quarterly basis: Deal value increased from about $5 billion in the first quarter of 2023 to about $28 billion in the second, and deal volume also grew from 19 to 43 deals quarter-over-quarter. A multitude of factors contributed to the lower total deal value in 2023 thus far, including the high cost of debt, the degree of industry concentration, volatility in certain deal types, and the high number of deals with undisclosed values. Comparing regions, the majority of global transaction value came from Europe, the Middle East, and Africa, with about 54% of the reported deal value in the first half of the year.
- Infrastructure deals dominate: Infrastructure deals made up about 50% of global deal value in the first half of 2023, followed by in-country scale deals at about 30% of deal value (see Figure 2). Infrastructure deals have accounted for much of the industry’s deal value and growth since 2019, primarily due to telecom divestments.
- Biggest deal: The largest announced deal of the first half of the year was an in-country scale transaction. Vodafone and Hutchison Group, the owner of Three, entered into a merger agreement to form the largest mobile network operator in the UK with a combined enterprise value of about $19 billion.
- Long-term view: Infrastructure deals and full asset divestments account for about half of all deal value since 2017 (see Figure 3).
Bain’s Quarterly Global Telecom M&A Insights
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Telecommunications M&A
Challenger consolidation and digital infrastructure deals resulting from the rising cost of debt will reshape the industry further.