Global mergers and acquisitions form a vital component of many corporate growth strategies, offering access to new industries, markets customers, products, and technologies. They also increase the financial strength of companies through increased scale and reach. Businesses must consider a wide range of factors before making international acquisitions or divestitures. These include regulatory, taxation, and cultural differences.
In 2024, the challenges of the capital markets and uncertain macroeconomic conditions affected deal activity. However, we expect M&A to increase in the second part of the year when original site vdr-tips.blog/pricing-guide-leading-virtual-data-room-providers/ these headwinds diminish and the results of various elections are widely known.
M&A can be triggered by other strategic objectives such as digital innovation or consolidation. AI, predictive robots, and smart factories, for example are boosting efficiency in manufacturing in the industrial sector.
To expand the market and increase the customer base, it’s important to purchase companies offering similar products or services across different geographical markets. This is known as market extension. An example of this is when PepsiCo bought Pizza Hut to significantly boost its soft drink sales.
M&A trends are also shifting to reduce the risk of geopolitical instability, focusing on sectors with better market outlooks, and investing in vertical integration and building supply chain resilience. Finally, as the amount of debt and cash available decreases we expect buyers and sellers to embrace complex structures to fill in the gaps in valuation, such as stock swaps minor stake sales, earnouts. This could involve using private equity funds to ensure the deal is viable.