Senior partners Jake Henry, Mieke Van Oostende, and Andy West discuss global M&A trends in 2024. They explore deal activity in various industries and the impacts of geopolitical uncertainties. The podcast also delves into strategies for success in M&A, navigating antitrust scrutiny, and the rise of sustainability-focused deals. An optimistic outlook is offered for M&A strategies in 2024, highlighting the importance of reducing market uncertainty for economic growth.
2024 M&A market shows signs of rebound with increased deal activity in TMT and Financial Services sectors.
Geopolitical uncertainties and regulatory challenges can impact M&A deal-making interests and timelines.
Executives are optimistic about M&A activities in 2024 due to stabilizing macro environment and positive market outlook.
Companies are using M&A as a strategic tool for transformation, focusing on accessing capabilities and new growth prospects.
Successful acquirers prioritize strategic deals, portfolio rotation, and effective divestitures to enhance long-term economic performance.
Deep dives
The Shift in M&A Environment for 2024
M&A executives witnessed a sharp decline in deal volume in 2023, leading to uncertainties and challenges in geopolitical environments. Despite facing questions like 'Is M&A dead?', a notable uptick in activity emerged in Q4, driven by sectors like TMT and Financial Services.
Positive Outlook and Stabilization in M&A Landscape
Expectations for a rebound in M&A activities in 2024 are fueled by a stabilizing macro environment and positive market outlook. Factors like reduced recession probabilities, stable interest rates, and market evaluations shifting towards stability are encouraging executives to deploy over $2 trillion in private equity dry powder.
Geopolitical Uncertainty Impact on M&A
Upcoming national elections and geopolitical uncertainties can influence companies' deal-making interests. Regulatory approvals, extended timelines, and high scrutiny may require companies to adapt and navigate through uncertain environments, potentially impacting the level of M&A activity.
Driving Factors for M&A Rebound in 2024
Increased dry powder, market evaluations, and evolving deal rationales are driving a potential uptick in M&A in 2024. Companies are exploring access to capabilities, cross-border deals, and new growth prospects, embracing M&A as a strategic tool for transformation and responding to market dynamics.
Economic Impact and Global Geopolitical Landscape
European economic challenges and geopolitical transitions are shaping the EMEA landscape, with companies cautiously navigating economic and geopolitical uncertainties. Executives acknowledge the need for M&A strategies to achieve corporate goals amidst volatile environments and global growth imperatives.
Regulatory Scrutiny and Deal Complexities
Heightened antitrust scrutiny and prolonged regulatory approvals are moderating M&A activities. Companies must navigate complexities in reviews and approvals, preparing for extended closing timelines and leveraging expertise to handle regulatory challenges.
Multiple Considerations in High Multiples Arena
Amid rising multiples and complex deal environments, deal makers must adapt to the need for more capital, strategic planning, and robust integration strategies. Sectors like energy, TMT, financial services, and healthcare face high valuations and seek acquisitions for capability access and scale benefits.
New Deal Rationales and Diverse M&A Approaches
The M&A landscape is witnessing a shift towards growth-oriented deal rationales focused on accessing capabilities and expanding service offerings. Companies are diversifying their M&A strategies by exploring new geographies, venturing into capability-led acquisitions, and pursuing value-accretive alliance models.
Importance of M&A Proficiency and Portfolio Management
Successful acquirers demonstrate proficiency in diverse deal types and sizes, emphasizing strategic deals, portfolio rotation, and effective divestitures. Managing portfolios strategically, featuring adjacencies and steering towards value-generating opportunities, enhances long-term economic performance and competitive advantage.
M&A dealmakers have been on a wild ride. From the pandemic-fueled rout in 2020 to 2021’s record-breaking recovery, followed by a steep decline in 2023, the global M&A market has offered something of a masterclass in volatility. In this episode, we are joined by senior partners Jake Henry, Mieke Van Oostende, and Andy West to discuss the trends in the global M&A environment in 2024 and what they mean for business leaders. Jake and Mieke recently published a report on McKinsey.com, Top M&A trends in 2024: Blueprint for success in the next wave of deals, which forms the basis for our discussion.