Global mergers and acquisitions are an important elements of many strategies for growth in corporations. They open up access to new markets, industries, customers, products, and technologies. They also boost financial power through increased size and reach. However, companies must be mindful of a variety of aspects when making international acquisitions and divestitures, from taxation and regulatory issues to cultural he has a good point differences.
In 2024, issues in capital markets and uncertain macroeconomic conditions weighed on deal activity. We anticipate M&A activity to increase in 2024 when capital markets and macroeconomic conditions improve.
M&A can also be driven by strategic goals including digital innovation and consolidation. AI predictive robots, AI, and smart factories, for instance, are driving manufacturing efficiency in the industrial sector.
To expand the market and expand the customer base, it is essential to buy companies offering similar products or services in different markets. This is known as market extension. A prime example is when PepsiCo purchased Pizza Hut to significantly boost its soft drink sales.
M&A trends include a shift to reduce the risk of geopolitical instability by focusing on markets that have better prospects, investing in vertical integration, and strengthening resilience of the supply chain. As the supply of cash and debt becomes more scarce we expect buyers to utilize complex structures, such as stock exchanges minor stakes sales, and earnouts, to fill in the gap in valuation. This may include using private equity investment funds to make the deals work.