Global mergers and acquisitions are an crucial to many strategies for growth in corporations. They open up access to new markets and industries, customers, products and technologies. They also increase the financial strength of companies through increased size and reach. However businesses must be aware of a range of factors when making international acquisitions and divestitures, from taxation and regulatory issues to cultural differences.
In 2024, the challenges of financial markets and uncertain macroeconomic situations have weighed heavily on deal activity. We anticipate M&A activity to increase in 2024 as the capital markets and macroeconomic conditions improve.
M&A can be driven by other strategic goals such as digital innovation or consolidation. For instance, rapid advancements in AI, predictive robotics and smart factories are boosting manufacturing efficiency in the industrial sector.
To expand the market and increase the client base, it is necessary to purchase companies offering similar products or service in different markets. This is known as market expansion. One example of this is when PepsiCo bought Pizza Hut to significantly boost its soft drink sales.
M&A trends are also shifting to reduce the risk of geopolitical instability check Pricing Guide – Leading Virtual Data Room Providers and focusing on sectors that have stronger market outlooks, investing in vertical integration and strengthening the resilience of supply chains. Additionally, as the supply of cash and debt decreases we expect buyers and sellers to adopt complex structures to fill in the gaps in valuation, such as stock swaps, minority stake sales and earnouts. This could involve using private equity funds to make the deal viable.