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Many companies see M&A deals as a crucial way to grow, even in the face of a slowing global economy. The high interest rates will continue to pressure dealmaking up to 2022. Our latest North American CFO Signals study showed that nearly half the respondents believed between 1% and 10 percent of their company’s growth in revenue could be attributed to M&A deals.

Although a number of industry-related challenges have slowed deals since peaking in mid-2022 The recent stabilization of inflation and interest rates is a positive indication that the worst is likely to be over. This, coupled with renewed confidence in the US economy and the easing of the fear of a recession will hopefully inspire more companies to seek out strategic deals this year.

As a result, we expect the year ahead to be an active one for M&A across a variety of sectors. The industrial sector is expected to remain a top target, particularly for acquisitions that target innovative technologies like EVs and cloud-based solutions. We also believe that the energy transition to accelerate, and that companies in this sector may seek to acquire assets and capabilities that will help them achieve success.

After a severe decline in 2022, we are anticipating an improvement in the tech sector in 2024 as artificial intelligence and its related applications (like artificial intelligence that is generative) draw the attention of businesses and investors as well as the general public at large. Healthcare is also a major area of focus for M&A as investors and companies compete to bring medical devices that are niche to the market.