Many companies see M&A transactions as an important way to grow even in the face of a slowing global economy. Inflation rates that are high will continue to put pressure on dealmaking up to 2022. Our latest North American CFO Signals study found that nearly half of respondents believed between 1% and 10 percent of their company’s revenue growth could be attributed to M&A deals.
While a myriad of challenges in the industry have slowed deal activity since peaking in mid-2022 the recent stability of inflation and interest rates is a positive indication that the worst is likely to be over. This, together with the renewed optimism in the US economic system and the ease of fears of a recession, will hopefully encourage more companies to look into strategic deals during this year.
We expect the upcoming year to be an active one for M&A across a variety of sectors. The industrial sector is predicted to remain a top target, especially for acquisitions targeting innovative http://thisdataroom.com/virtual-data-room-tool-for-legal-professionals/ technologies like EVs or cloud-based solutions. We also expect the shift to energy will be accelerated and that companies in this sector might seek to acquire assets and capabilities that can assist them in achieving their goals.
After a severe downturn for the tech industry in 2022 we expect to see growth in 2024 since artificial intelligence (AI) and its related applications, such as generative AI, grab the attention of businesses, investors and the general public. The healthcare sector is also a major focus for M&A, as both companies and investors vie to bring niche medtech products to market.