Global mergers and acquisitions are a critical element of a variety of corporate growth strategies, allowing access to new industries, markets customers, products, and technologies. They also improve financial strength through increased scale and reach. However companies must be aware of a myriad of factors when making international acquisitions and divestitures, from taxation and regulatory issues to cultural differences.
In 2024, issues in the capital markets and uncertain macroeconomic conditions weighed on deal activity. We anticipate M&A activity to pick up in 2024 as capital markets and macroeconomic conditions improve.
M&A can also be driven by strategic objectives like consolidation and digital https://vdr-tips.blog/how-to-manage-granular-permissions-for-individual-users-in-vdr/ innovation. AI predictive robots, AI, and smart factories, for instance, are driving manufacturing efficiency in the industrial sector.
To expand the market and expand the customer base, it is important to acquire companies with similar products or services in different markets. This is referred to as market extension. PepsiCo bought Pizza Hut in order to increase sales of its soft drink.
M&A trends are also shifting to reduce the risk of geopolitical instability and focusing on sectors that have better market outlooks, and investing in vertical integration and enhancing the resilience of supply chains. Additionally, as the supply of cash and debt decreases we expect buyers and sellers to embrace complex structures to fill in the gaps in valuation, such as stock swaps, minority stake sales and earnouts. This could include the use of private equity funds to ensure the deal is viable.