- M&A is experiencing what some are calling a rebound due to a number of economic factors including expected interest rate decreases and stalled inflationary levels.
- The first quarter of 2024 has already seen some blockbuster deals, with U.S. M&A volumes surging 59% to $431.8 billion (Source: Dealogic) in the technology, pharmaceutical and energy sectors.
- Despite the positive outlook, leaders may face a number of challenges, including valuation misalignment between buyers and sellers, the impact of regulatory oversight on hold periods and continued market headwinds such as geopolitical tensions.
Three main factors underline our newfound optimism that we are entering a new phase of dealmaking in 2024: first, the recent improvement in financial markets, spurred by decelerating inflation and expected reductions in interest rates; second, the pent-up demand for (and supply of) deals; and third, the pressing strategic need for many companies to adapt and transform business models that is the very essence of dealmaking.
— PwC, 2024 Outlook: M&A Trends
According to Pitchbook, 2023 was the second worst M&A year since 2013, with a global M&A deal value of $3 trillion. Today, however, the market is pointing to heightened investor confidence for 2024, due to market shifts such as the Fed’s pause on interest rates hikes, stalled inflation and recession fears largely on hold for the moment.
Read more below on the activities and trends defining today’s M&A outlook and how leaders can prepare for a rebound.
Why Expectations are High for 2024: Q1 Points to a Strong Rebound
More than three-quarters of respondents — 79% of corporate leaders and 86% of private equity leaders —expect an increase in deal volume over the next 12 months.
— Deloitte 2024 M&A Trends Survey