Global Mergers and Acquisitions in 2023

Global mergers and acquisitions are a complex and nuanced procedures that involve a variety of stakeholders and rife with potential pitfalls. They can also transform businesses and speed up growth.

The global M&A industry saw its lowest level in 10 years in 2023, as investors were more concerned about the effect of rising rates, geopolitical tensions, and other factors. (See Chart 1). Some experts believe that activity will increase in 2024 as why not try this out some of the headwinds receding.

This optimism is due to the fact that there will be a backlog of assets available for sale in 2024. Many private equity (PE) portfolio companies have not sold recently due to the fact that valuations have dipped. This could open up opportunities for strategic buyers who want to acquire undervalued assets.

The conclusion of the cycle of interest rate hikes and a recovery on the stock market will increase the number of loans available for acquisitions. This will reduce the costs of transactions and accelerate deal finalization. M&A will also be used by more companies in order to mitigate geopolitical risks and expand into new industries, markets or revenue streams.

The back half of 2023 saw several structured transactions, including sales of earnouts and minority stakes — structures which require buyers to pay out the full purchase price only after certain financial or operating milestones are achieved after the deal is completed. This trend is likely to continue as acquirers attempt to align incentives and close the gap in their valuations.

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