Upcoming Deal Trends
Many companies view M&A transactions as a key way to grow even with the global economic slowdown. A high rate of interest will continue to pressure deals until 2022. In fact, our most recent North American CFO Signals survey revealed that more than half of respondents believed that between 1 10 and 10 percent of their company’s growth this year could come from M&A transactions.
Although a range of industry challenges have flattened deal activity since peaking mid-2022 The recent stabilization of inflation and interest rates is a positive sign that the worst is likely to be over. This, coupled with renewed confidence in the US economy and the easing of worries about a recession could hopefully encourage more businesses to pursue strategic deals this year.
As a result, we expect the upcoming year to be one of the most active for M&A in a variety of sectors. Industrial companies will remain a top target, particularly for acquisitions aimed at cutting-edge technologies such as EVs, and cloud solutions. We also anticipate the energy transition to accelerate, and companies in this industry will likely look to acquire additional assets and capabilities that will help them succeed.
After a significant recession in 2022, we are expecting to see an increase in the tech industry in 2024, as artificial intelligence and its related applications (like generative AI) capture the attention of businesses, investors, and the general public alike. The healthcare sector is an important area for M&A, as companies and investors compete to bring medical devices that are niche to market.
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