Many companies still see M&A deals as a crucial route to growth regardless of the global slowdown in economic growth. The high interest rates will continue to put pressure on deals until 2022. In fact, our most recent North American CFO Signals survey showed that nearly half of respondents believed that between 1 percent and 10 percent of their growth this year could come from M&A transactions.
While a variety of industry issues have slowed deals since peaking in mid-2022 The recent stabilization of inflation and interest rates is a positive sign the worst is likely to be over. This, along with renewed confidence in the US economy and lessening worries about a recession could hopefully encourage more businesses to seek out strategic deals this year.
We believe that the coming year will be a busy year for M&A across a variety of industries. The industrial sector will remain an important target, especially for acquisitions that target innovative technologies such as EVs and cloud solutions. We also expect the energy transformation to accelerate, and companies in this industry will likely be looking to acquire additional assets and capabilities that will help them succeed.
After experiencing a major recession in 2022, we are expecting to see a rebound for the tech industry in 2024, as artificial intelligence and its related applications (like generative AI) capture the attention of businesses as well as investors and general public. Healthcare is also an important area for M&A, as companies and investors compete to bring medical devices that are niche to the market.
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