The deal market in 2024 is likely to see a return from the challenges of 2023. The 2023 deal market is likely to see a revival from the challenges of 2023.
Deal making will be hampered by a number factors. First, the slowdown in M&A activity is due largely to capital limitations. The economic environment has changed as a result of http://thisdataroom.com/virtual-data-room-tool-for-legal-professionals/ rising interest rates, which makes it less appealing to invest in growth through acquisitions and new investment. This is particularly applicable to the US, which drives a significant portion of global deal value, with two-thirds of the top 100 deals of 2021 involving a US company as a bidder or target.
The second reason is that increased regulatory scrutiny is stifling M&A. Concerns over antitrust, national security and other issues are putting more scrutiny on larger deals and limiting the potential for industry consolidation. The trend is expected to continue through 2024.
Thirdly, the focus on generative AI (GIA) will lead to more capability-building M&A. Businesses that don’t have the skills or time horizon to build GIA capabilities internally will turn to M&A to acquire them. Additionally, the environmental, social and governance (ESG) agenda continues to gain traction with CEOs. They will increasingly seek to boost ESG initiatives by purchasing companies that will assist them in reaching their growth, earnings, and valuation goals.