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November 2022 / 5 Min Read

Driving the Deal: Navigating Global Trends for the Technology, Media and Telecommunications Sector


The digital revolution is driving an uptick in deal activity across the TMT sector, but several global trends bring new risks and opportunities.


Key Takeaways

  1. The competitive landscape is changing. While technology-enabled transformations can be a game-changer, but it’s critical to align deals with an overall growth strategy.
  2. Several macro trends continue to impact deal activity globally: economic volatility; environmental, social and governance (ESG); supply chain disruption and litigation.
  3. Insurance capital can be used to de-risk the sellers or buyers, effectively enabling them to guarantee the economic effects of success. There are three main forms of litigation risk solutions.

With deals increasing in complexity, there are multiple considerations at play.

Special Purpose Acquisition Companies (SPACs)

Intellectual Property Due Diligence

Cyber and Technology Due Diligence

Digital Threat Environment

Increased Reliance on Intangible Assets

Increased Regulatory Scrutiny

Litigation Risk

Environmental, Social and Governance (ESG) Due Diligence

Supply Chain Due Diligence

Evolving Digital Integration Risks

Capital Requirements

Human Capital Due Diligence

Competing in the Current Marketplace

To compete in a growing and fast-paced commercial environment, organizations need to concentrate on their value-creation strategy. Amid ongoing economic volatility, the focus is on freeing up cash for future investments and growth acceleration. Challenges around price, regulation and pressure to deliver returns remain, but it’s critical to align deals with an overall growth strategy.

Technology-enabled transformations can be a game-changer, but understanding which opportunities would be most compatible with an organization is an important consideration.

Re-engineering processes that drive down cost, speed up delivery, increase automation, and meet customer demands quickly and effectively, are key drivers.

Macro Trends Impacting M&A Across the TMT Sector

Economic Volatility

Driven by the Ukraine-Russia crisis, rising interest rates and the risk of a recession – is impactive transactional activity globally.

A traditional economic model which addresses inflation by raising interest rates would suggest that debt financing would become more expensive, making high multiples in acquisitions more difficult to achieve in a cost-effective manner. As buyers’ cash costs more, sellers’ deal prices go down, and the M&A market could slow. However, finance markets may be able to absorb a fair amount of rate pressure before M&A financing becomes expensive enough to impact the market.

For the TMT sector, traditional banks may not always be the main finance providers. Private equity, hedge funds, family offices, sovereign wealth funds and other investors all contribute enormous amounts of capital to M&A markets and may be able to continue lending at low rates and absorbing thinner margins.1

Environmental, Social and Governance (ESG)

ESG commitments are changing the way TMT companies are valued. Investors are assessing ESG ratings with increasing scrutiny, directly impacting investor appetite.

With shareholders and regulators scrutinizing a company’s ESG practices, it’s important to understand as many risks as possible in order to accurately assess and maximize the overall value. ESG risks take different forms, and failure to disclose an environmental or social issue, or a difference between commitment and action, creates a risk of litigation post-transaction. Identifying risks is becoming increasingly complex. The Task Force on Climate-Related Financial Disclosures (TCFD) is starting to demand a higher level of risk visibility – within the organization itself and throughout the supply chain.

Due diligence around environmental and climate change policies can mean acquiring the future costs of any carbon emissions, but ESG refers to more than climate change. Driven by the prolonged social isolation and increasingly remote working models, emphasis on human-capital issues has put an organization’s culture, workforce and social component under the spotlight. Issues including employee engagement, loyalty and wellbeing, corporate purpose and overall workforce resilience are now playing a part in the M&A due diligence assessment. Social due diligence needs to include visibility across areas like wage rates, diversity, avoidance of child or forced labor, or a company’s health and safety track record.

Over 60 percent of global M&A activity is currently taking place in Asia-Pacific and EMEA – with the TMT sector accounting for over 30 percent

Source: Eversheds Sutherland 2021

Investors and regulators are applying ever more pressure onto companies to have strong ESG practices. Regulators in the United States and Netherlands have begun to set ultimatums to companies deemed to not be doing enough to meet their ESG (in particular, environmental) targets. Such transparency around targets and deadlines opens up the possibility of litigation if these are not met; there is speculation that ESG-related litigation could become the next major driver of D&O claims.”

Toby Russell
Aon M&A and Transaction Solutions



Supply Chain

Driven by the Ukraine-Russia crisis, rising interest rates and the risk of a recession – is impactive transactional activity globally.

The perils that may cause supply-chain interruptions can be very broad, from pandemics and cyber-attacks to climate change, political turbulence, credit failure and recall events. As consumers and governments demand change, the way organizations are doing business is coming under scrutiny. Supply chain risks have long-tail exposures but limited risk transfer solutions. Investigating supply chain risks may offer opportunities to reshape existing operating models and drive innovation, optimizing value during the deal phase.2


The risk of litigation happens when disclosure, intention and action are mismatched during a transaction. Any lack of clarity can result in parties misunderstanding the risks that exist and/or underestimating the value creation opportunities an organization can offer.

Insurance capital can be used to de-risk the sellers or buyers, effectively enabling them to guarantee the economic effects of success. There are three main forms of litigation risk solutions:

  • Adverse Judgment Insurance protects a defendant from material loss resulting from an adverse judgment
  • Judgment Preservation Insurance protects a claimant against the risk that a favorable damages judgment will be reversed on appeal, or that the quantum of awarded damages will be reduced
  • After the Event Insurance protects the insured’s own disbursements and/or its potential liability for the other side’s costs if it loses the case

1 M&A Markets, Inflation, Uncertainty: What to Watch
2 Aon Global Risk Management Survey 2021


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