The deal market in 2024 is likely to see a revival from the challenges of 2023. Inflation has been slowed, and could even be on the verge of declining as interest rates have stabilized (though they may not be back to pre-pandemic levels), private credit is becoming available for a variety of deals, and traditional equity markets have regained ground, with record-breaking highs.
However, a range of things will continue to hamper the process of making deals. The slowdown in M&A is largely due capital restrictions. The rising interest rates have altered the check out this site economic landscape and made it less appealing to invest in growth through acquisitions and new investments. This is especially applicable to the US which is responsible for a large proportion of global deal value as well as two-thirds of the top hundred deals in 2021 involving an US company or a target.
The second reason is that increased regulatory scrutiny is limiting M&A. Concerns over antitrust, national security, and other issues are putting more scrutiny on larger deals and restricting the possibilities for industry consolidation. The trend is expected to continue until 2024.
Thirdly, the goal of generative AI (GIA) will drive more M&A to develop capabilities. Businesses that don’t have the expertise or time horizon to develop GIA capabilities through internal investment will turn to M&A to acquire these capabilities. Finally, the environmental governance, social, and governance (ESG) agenda continues to gain momentum among CEOs. They are increasingly looking to strengthen ESG initiatives through acquisitions which will assist them in achieving their growth, earnings and valuation goals.