Upcoming Deal Trends
Many companies see M&A transactions as a key way to grow, even in the face of a slowing global economy. A high rate of interest will continue to pressure dealmaking up to 2022. In fact, our most recent North American CFO Signals survey revealed that nearly half respondents believed that between 1 10% and 10 percent of their growth this year could come from M&A transactions.
While a variety of industry issues have slowed deal activity since peaking in mid-2022, the recent stabilization of interest rates and inflation is a positive sign that the worst is likely to be over. This, along with the rising confidence in the US economic system and the dissipation of fears of a possible recession, will hopefully encourage more companies to consider strategic deals during this year.
Therefore, we expect the next year to be one of the most active for M&A across a range of sectors. The industrial sector will continue to be the most sought-after target, especially for acquisitions focused on cutting-edge technologies such as EVs, and cloud solutions. We also anticipate that the energy transition to accelerate and that companies in this sector may look to acquire assets and capabilities that will help them succeed.
After experiencing a major slowdown in 2022, are expecting to see an increase in the tech sector in 2024, as artificial intelligence and its applications (like generative AI) capture the attention of companies as well as investors and the general public alike. The healthcare sector is also an important focus for M&A since companies and investors compete to bring medical devices that are niche to market.
