The deal market in 2024 is likely to witness an increase in activity following the challenges of 2023. The market for deals in 2023 is likely to experience a revival after the difficulties of 2023.
However, several factors will continue to hinder the process of making deals. The slowdown in M&A is largely due capital limitations. The economic landscape has changed because of rising interest rates, making it less appealing to invest in growth through acquisitions and new investment. This is especially relevant to the US which is responsible for a large portion of global deal valuations and with two-thirds of the top hundred deals in 2021 involving a US company or targets.
Second, heightened regulatory scrutiny is stifling M&A. Antitrust, national security and other issues are increasing the scrutiny of larger deals, and hindering consolidation opportunities. The trend is expected to continue until 2024.
Third, the focus of generative AI (GIA) will drive more M&A to develop capabilities. M&A will be used by companies that lack the resources or time to develop GIA capabilities internally. Finaly, the environmental social and governance agenda is gaining traction among CEOs. They are more likely to increase ESG initiatives by buying companies that will help them reach helpful resources their earnings, growth, and valuation goals.