Shifting Deal Rationales towards Growth and Capability Building in M&A

Deal rationales in M&A have shifted towards focusing strongly on growth and capability building, with a notable emphasis on acquiring new capabilities, services, products, and entering new markets. While consolidation remains important in some industries, the majority of deal rationales (50-60%) are now centered around driving growth and revenue. This shift is particularly evident in heavily regulated sectors and industries with high capital investments. The trend reflects a cycle of uncertainty leading to consolidation, followed by a resurgence of deals focused on accessing growth opportunities, expanding core capabilities, entering adjacencies, and acquiring new technologies like AI or entering sectors such as green transition. Companies are increasingly realizing the necessity of M&A to access capabilities and assets that they cannot build internally, positioning themselves for sustained growth and competitiveness.