Following a challenging year for mergers and acquisitions (M&A), the macroeconomic climate is now stabilising, and confidence returning to boardrooms. As a result, we expect the recent growth in M&A to gain momentum into 2024, with deal-making influenced by geopolitics, new technology, and the regulatory response to it.
Sarah Jones, Global Head of Corporate, says: "With more stable macroeconomic conditions M&A activity will increase as corporates focus on their core businesses and supply chain security, the latter likely fuelling an uptick in cross-border activity. We also expect 2024 to be a more favourable year for private capital as financial sponsors clear a congested pipeline. Uncertainties caused by complex geopolitics and upcoming elections could put a dampener on this activity, however, so the full extent of the increase is hard to predict."
James Lloyd-Thomas, Senior Associate in the Corporate practice in London, says: "The global trends of decarbonisation, digitalisation and deglobalisation will drive deal-making. Investors will aim to capitalise on supportive government policies and access emerging technologies. However, these trends are also driving the proliferation of new foreign investment regimes and increased regulatory scrutiny, which will contribute to deal uncertainty and increase execution risk.
The energy and healthcare sectors are ones to watch. Expect substantial M&A activity in these areas as the energy transition intensifies and drug patent cliffs encourage the pursuit of inorganic growth. Generative AI is also expected to bring about significant transformation in the tech sector."