Global mergers and acquisitions are a critical part of many corporate growth strategies, allowing access to new markets, industries customers, products, and technologies. They also improve the strength of your financials through a greater the size and reach. However, companies must be mindful of a range of factors when making international acquisitions or divestitures, ranging from taxation and regulatory issues to cultural differences.
In 2024, the challenges of the capital markets and uncertain macroeconomic situations caused a lot of deal activity. However, we expect M&A to increase in the second half of the year as these headwinds ease and the results of different elections are widely known.
M&A can be triggered by other strategic goals, such as digital innovation or consolidation. AI, predictive robots, and smart factories, for instance are boosting manufacturing efficiency in the industrial sector.
To expand the market and expand the customer base, it is necessary to buy companies offering similar products or service in different geographical markets. This is known as market extension. PepsiCo purchased Pizza Hut in order to increase sales of its soft drink.
M&A trends include a shift to mitigate risks to discover this info here geopolitics, focusing on markets with better prospects, focusing on investing vertically, and improving resilience of the supply chain. As cash and debt availability shrinks, we expect buyers and sellers to take on complex structures to bridge valuation gaps such as stock swaps minor stake sales, earnouts. This could mean using private equity funds to make the deal financially viable.