Global Mergers and Acquisitions Trends in 2024
Global mergers and acquisitions form a vital element of a variety of corporate growth strategies, providing access to new industries, markets customers, products and technologies. They also improve the strength of a company’s financial position through greater scale and reach. However companies must be aware about a variety of issues when making international acquisitions and divestitures, from taxation and regulatory issues to cultural differences.
In 2024, the complexities of capital markets and uncertain macroeconomic situations affected deal activity. However we expect M&A to increase in the second half of the year as these headwinds recede and the results of a variety of elections are well-known.
M&A can also be driven by strategic goals including digital innovation and consolidation. For instance, rapid advancements in AI as well as predictive robotics and smart factories are driving efficiencies in manufacturing in the industrial sector.
A key strategy is to acquire companies in different geographical markets that have similar products or services to expand the market and increase the number of customers. This is known as market extension. PepsiCo bought Pizza Hut in order to increase sales of its soft drink.
M&A trends include a shift to mitigate the risk of geopolitical instability and focusing on markets with better prospects, investing in vertical integration, and strengthening the resilience of supply chains. As the demand for cash and debt grows, we expect buyers to utilize complex structures, like stock exchanges, minor stakes sales and earnouts, in order to bridge gaps in valuation. This may include using private equity investment funds to make deals feasible.