📉 Deals are dwindling

In today's email, we've got:

  • the reason that M&A activity fell sharply at the end of last year

  • a law firm in trouble for acting way below the standards

  • free and instant virtual high-fives

If you take just one thing from this email...

Interest rates that are set by central banks have an impact on how cheap or expensive it would be to borrow money. If interest rates go up, borrowing money becomes 'more expensive' as you'll have to repay more money over time. A lot of M&A deals use debt to fund them so, as interest rates rise, the demand for these expensive loans falls meaning less M&A activity takes place.


It's that time of the year where everyone's setting their New Year's resolutions. 

I came across this idea recently which might help you stick to your resolutions this time round.

It's called the Motivation Equation.

The equation is based on hundred of studies done on the topic of motivation and it looks like this 👇

It outlines four main factors that you can use to maximise your motivation, which are:

  • Expectancy: increase the perceived odds of success.

  • Value: increase the perceived reward.

  • Impulsiveness: decrease the number of distractions.

  • Delay: decrease the time it will take to get the reward.

You can read more about this idea here but as it's resolution season, I thought it could be useful to share.

My New Year's resolution (or more of a short-term goal) is to learn to do a muscle up (a move where you pull yourself above a pull-up bar and do a dip at the top).

I've always thought these were cool and have tried to learn it in the past but never succeeded.

I've spent a while on it now but I'm committed to keep it going this time!

Here's where I am with my progress now - you'll see I need some help from a friend to get over.

I've posted it here now to make it public, so let's call this my 'social accountability' commitment (you all have permission to ask me about my progress at any stage to so I make sure I keep it up)!

- Idin


📉 Deals are dwindling

Credit: Giphy

What's going on here?

There’s been a record drop in global mergers and acquisitions (M&A) deals in the second half of 2022 due to rising interest rates.

What does this mean?

Central banks around the world have been increasing their base interest rates (i.e. the rate at which they lend money). This is in an effort to combat inflation and it works by making it more ‘expensive’ to take out a loan, resulting in fewer loans being pursued. The reduced access to money through loans means less demand for stuff, resulting in a reduction in price, helping battle inflation - at least that’s the theory.

The war in Ukraine has also been a contributing factor to inflation (as fewer goods are being exported from there). It’s also adding to global confidence/uncertainty - and markets always hate uncertainty.

Increased interest rates have also affected the M&A markets as reduced access to loans has meant reduced ability to finance new acquisitions and get deals done.

How slow has it got?

Immediately after the pandemic, M&A activity in the world was hot as the markets seemed to be making up for lost time while the world was in a standstill. This was fuelled by countries taking measures to stimulate their economies again, including emergency cuts to interest rates.

This pace has slowed down, though. 

Across the first half of 2022, M&A activity worth $2.2tn was announced. However, from July to December 2022, that number fell to $1.4tn - representing a 36% drop.

When comparing 2022 to 2021, there’s been a 38% drop in the value of deals done, which is the biggest year-on-year drop since 2001. 

Dealmakers have also been put off by increased regulatory scrutiny - particularly in the US, and particularly in the tech sector. This has got in the way of some major planned transactions, such as Microsoft’s acquisition of video game maker Activision Blizzard.

How are companies funding acquisitions at all?

Some buyers are just accepting the higher rates of borrowing from banks and pushing through the deals. Mark Sorrell, the co-head of global M&A at Goldman Sachs, said that now, “financing for M&A is there, but it’s a much [higher] cost and it’s not available for all issuers.”

Private equity houses (who traditionally buy private companies using debt to then eventually sell on for a profit) have been struggling to access the cheap borrowing they’ve been used to over the recent years.

One thing some of them have been doing is buying the debt that the target company owes from the lender (e.g. a bank). This way, a private equity buyer can acquire the target at a lower price as debt is often sold by the lender at a discount to its face value (because it’s not 100% certain that you'll receive the full face value if the company defaults on payments). By purchasing the debt, the private equity firm can then become the main creditor of the target company, giving it more control over the target's financial affairs. This is a strategy that asset management company Elliott Management used in its $16bn takeover of television ratings provider Nielsen.

Why should law firms care?

M&A is the main type of work that corporate teams at commercial law firms handle. It’s typically a major source of income for these firms. This is why deal activity is important to them - when there is more M&A activity, there is more work for corporate lawyers and this leads to increased revenue and profits for law firms. 

In the future, these teams hope that the global economy will improve, with lower interest rates, more funding available, and more M&A deals taking place. Eric Swedenburg, a partner at the law firm Simpson Thacher, was a bit more hopeful, saying that “at some point during the year . . . we’ll start building up again.” He added “it won’t be right out of the gate in January. I don’t think we’re out of the woods yet.”


Can you spot the fake?

Below, we've got four headlines. Three of them are real and from the past year and one's completely fake.

Can you spot the fake one?

  1. New study finds that people who rewatch TV shows get better sleep

  2. TSA agents find gun inside raw chicken at Florida airport

  3. Nurse accused of amputating man’s foot for her family’s taxidermy shop

  4. It’s perfectly normal to see baby puffins thrown off cliffs in Iceland each year

Credit: Morning Brew

Scroll down to the bottom to see the answers. 👀


  • 🚨 Law firm Slater and Gordon have received fines of £82,000 for breaches of the SRA regulations: Their breaches include cases where the client wasn't updated on their matter, the matter wasn't progressed for ages and court directions weren't followed.

  • 🛢 ExxonMobil is suing the EU to block the energy windfall tax: The new law proposes to tax the energy companies on the increased money they've received for their energy because of the war in Ukraine. ExxonMobil, the US energy giant is bringing the lawsuit against the EU as it argues that it's "counter-productive".

  • 🏅 Lawyers have featured on the King's New Year's OBE list : The list included paralegal Shah Begum, from the law firm Gowling WLG. She receives the British Empire Medal for her services to equality, diversity and inclusion. You can check out the rest of the lawyers on the list here.


  • 🙏 Random: If you've just finished a task but no one's around you, share a high-five with a real-life stranger on the internet.

  • 🧘🏽‍♀️ Focus: Use this website to create the perfect blend of ambient noise for when you're studying, chilling or whatever else.

  • 😂 Haha: In case you needed it in your life, here's a group of people who sort-of look like Adam Sandler.

  • 🗞 Daily News: Part of commercial awareness is keeping up with the news. This newsletter gives you daily news updated without no clickbait, no agenda and no bias.*

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Quiz Answer: 

Number 1 is the fake one - the rest are completely true!