Global mergers and acquisitions form a vital part of many corporate growth strategies, allowing access to new markets, industries, customers, products and technologies. They also boost the financial power of a company through greater scope and impact. Companies must take into account a variety of factors before making international acquisitions or divestitures. These include taxation, regulatory concerns and cultural differences.
In 2024, the complexities of financial markets and uncertain macroeconomic conditions have weighed heavily on deal activity. We expect M&A activity to increase in 2024 when capital markets and macroeconomic conditions improve.
M&A can be triggered by other strategic goals, such as consolidation or digital innovation. AI, predictive robots, and smart factories, for instance are enhancing manufacturing efficiency in the industrial sector.
A key strategy is to acquire companies in different geographical markets that have similar products or services in order to increase market reach and customer base. This is referred to as market extension. PepsiCo purchased Pizza Hut in order to https://vdr-tips.blog/transaction-rooms-mobile-apps-main-functions increase its sales of soft drinks.
M&A trends include shifting to lessen the risk of geopolitical instability and focusing on sectors that have more favorable market outlooks, as well as investing in vertical integration and building supply chain resiliency. As the supply of cash and debt decreases, we expect buyers and sellers to adopt complex structures to bridge valuation gaps, like stock swaps or minority stake sales as well as earnouts. This could mean using private equity investment funds to make deals work.