The North American M&A market continued to decline in the third quarter of 2023 as dealmakers remained hesitant given the lingering macroeconomic uncertainty and geopolitical concerns.

High funding costs drove down financial sponsor activity, with PE firms looking beyond traditional LBOs to get transactions done. Bank M&A was also slow this quarter, although other areas of the financial services sector began to show signs of life. 

Despite the sustained M&A slowdown, significant dry powder remains in the private equity market, with U.S. corporations holding significant cash balances, giving some experts hope that dealmaking activity could be poised for a rebound as economic conditions improve.