Global mergers and purchases are an an important part of numerous corporate strategies for growth. They provide access to new markets, industries, customers, products, and technologies. They also boost financial power through increased scope and impact. However companies must be aware of a variety of aspects when making international acquisitions or divestitures, from taxation to regulatory issues to cultural differences.
In 2024, the complexities of capital markets and uncertain macroeconomic situations have weighed heavily on deal activity. However we anticipate M&A to increase in the second part of the year when these headwinds recede and the results of different elections are known.
M&A can check my source also be driven by strategic objectives including consolidation and digital innovation. For instance, rapid advances in AI, predictive robotics, and smart factories are boosting efficiency in the industrial sector.
To expand the market and increase the client base, it is necessary to acquire companies that offer similar products or service in different geographical markets. This is known as market extension. One example of this is when PepsiCo bought Pizza Hut to significantly boost its sales of soft drinks.
M&A trends can also be influenced by shifting strategies to combat the risk of geopolitical instability by focusing on sectors with better market prospects, investing in vertical integration, and enhancing supply chain resilience. As the supply of cash and debt becomes more scarce buyers are expected to employ complex structures like stock exchanges, minority stakes sales, and earnouts, in order to bridge valuation gaps. This could include the use of private equity investment funds to make the deals work.
