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Companies are still being bought and sold, even in the current unsettled economic environment where Britain and other countries around the world are all going through uncertain times.

Times may be tough, but firms on an expansion drive may see this as perfect time to snap up toiling rivals at a bargain-basement price, while other businesses looking to slim down their operations may wish to offload non-core assets to free up muchneeded cash.

Deals come in all shapes and sizes, and we recently saw a notable achievement for Aberdeen’s Ithaca Energy when it became the largest company to float on the London Stock Exchange in 2022.

However, mergers and acquisitions activity in the UK did drop considerably last year from its recordsetting 2021 back to pre-pandemic levels.

It was also a year of changing fortunes in the M&A field in Britainactivity slowed down considerable in H2 compared to H1.

PwC reports that the UK had 4,232 transactions during 2022, compared to 5,033 for the previous year - a 16% decline.

Deal volume for H1 was also much higher than H2, with 2,394 transactions completed in H1 compared to 1,838 in H2.

There were £93.5billion worth of British deals in H1 compared to £51.4billion in H2 - bringing the total value for the year to £144.9billion. However, this figure was down 56% compared to the record £332.1billion in 2021.

The worldwide M&A market also experienced a sizeable M&A drop in 2022.

The value of transactions plunged to $3.8trillion (£3.15trillion) from $5.9trillion (£4.89trillion) in 2021 - a 36% drop.

Bain & Company commented that, after a blockbuster year for M&A in 2021, the first five months of 2022 reflected continued strong dealmaking activity around the planet.

The big turning point was said to have occurred on June 16, 2022, when an interest-rate hike by the US Federal Reserve Bank, combined with heightened macroeconomic uncertainty, put a chill on the deal market.

Megadeals greater than $10billion (£8.3billion) went on pause while smaller deals slowed. Deal multiples tempered. Yet volumes dropped by only 12%, suggesting resilience and commitment among dealmakers.

In April, Ithaca Energy announced it had reached an agreement to take over Siccar Point Energy for up to $1.46billion (£1.21billion) to position it as one of the leading exploration and production operators in the UK North Sea through the addition of four of the country’s largest fields to its portfolio.

Then, in November, Ithaca defied volatile markets with Britain’s largest initial public offering of 2022.

Ithaca’s IPO gave the company an initial valuation of £2.45billion.

Other deals for North Sea assets could be on the cards for 2023, but they may be hampered by factors including uncertainty resulting from the UK Government’s new windfall tax on oil and gas operators and Labour’s opposition to fresh investment in the production of hydrocarbons.

Also, the Scottish Government’s “presumption” against new exploration for oil and gas will not have inspired confidence in investors who potentially wish to invest in the basin.

Earlier this month, CNOOC is reported to have paused a planned sale of its UK North Sea portfolio, which could have been valued at as much as £2.4billion in a deal. Initial offers failed to meet the Chinese oil giant’s expectations for the business, said sources.

They added that, while the deal has been put on hold for now, CNOOC could resume a sale once conditions improve.

Alasdair Freeman, a Partner in the corporate finance team at Burness Paull, said that Aberdeen’s M&A market was buoyant during 2022, particularly during the first half following on from a strong 2021.

He added: “From a Burness Paull perspective, a particular highlight was our role advising Incremental Group, a Scotland-headquartered company with a strong Aberdeen presence, which was acquired by Telefonica Tech in a deal worth up to £175million.

“The second half of the year saw a slight softening in the broader market due to economic headwinds and uncertainty arising from the war in Ukraine, the cost-of-living crisis, the UK government windfall tax, and rises in the interest rate.”

However, Alasdair said Aberdeen was partially insulated due to the increased focus on energy.

He went on: “We have continued to see strong deal flow and, while the wider economic landscape is undoubtedly more challenging than it was a year ago, the Aberdeen market remains fundamentally strong.

“For that reason, our expectation is that transaction levels will remain robust during 2023, with a particular focus on technology and investment in renewables and carbon reductionalbeit the increased cost of debt may impact valuations.

“As a leading global energy centre, Aberdeen remains a hub for technological innovation in the sector, particularly in energy services.

“Whether it’s piece of hardware that makes a process more efficient and reduces costs, or software that can help with monitoring and data capture, Aberdeen contributes hugely to developing solutions that can be deployed globally - which are attractive to investors and trade buyers.

“There will also be opportunities created by the need to fund renewables and carbon reduction.

“While the big energy operators have to demonstrate value today and help ensure short-term energy security, they also need to tell a story about what the business looks like in 10-20 years’ time as the transition to renewables and clean energy takes place. There are different strategies for doing that.

“On top of this, we expect transaction activity will be fuelled by privateequity activity.

“The lifespan of most private-equity funds is 10 years, and many came into the market between 2012 and 2014.

“Therefore, they are reaching a point when they will have to make a decision about whether to hold onto the asset as part of a new fund or take advantage of a strong market to divest.

“All of these factors lead us to believe that there will continue to be an active Aberdeen M&A market during 2023.”