Global mergers and purchases are complicated, nuanced procedures that involve a variety of stakeholders. They can be fraught with pitfalls. But, they also have the power to transform companies and accelerate their growth.

The global M&A industry saw its lowest level in 10 years in 2023, as investors were increasingly concerned about the impact of rising rates, geopolitical tensions and other factors. (See Chart 1). Some experts believe that the market will rebound in 2024, as some of the headwinds diminish.

This optimism is due to the fact that there will be a backlog of assets available for sale by 2024. In recent years, many private equity (PE), portfolio companies haven’t sold due to falling valuations. This provides strategic buyers with the opportunity to acquire assets at a lower price.

Furthermore, the end of the interest rate-hike cycle and a rebound in the stock market will increase the availability of debt financing for acquisitions. This will lower the cost of transactions and speed up the closing of deals. In addition companies will be more likely to leverage M&A as a way of lessening the risk of geopolitical instability as well as expanding into new markets, sectors or revenue streams.

The second half of 2023 saw several structured transactions, like sales of earnouts and minority stakes — structures which require buyers to pay out the full purchase price only if certain financial or operating milestones are https://vdr-tips.blog/what-is-capital-raising met after the deal is completed. This trend will likely to continue as buyers attempt to align their incentives and close the gap in their valuations.