Upcoming Deal Trends

In April, L’Oreal signed a deal to purchase the beauty brand Aesop. Hewlett Packard Enterprise acquired Israeli cloud security firm Axis for $500 million. Additionally, U.S. midstream company Energy Transfer merged with Lotus Midstream Operations for $1.45 billion. Analysts predict that these and other deals will boost M&A activity in the second half of 2023.

However, the fundamental conditions hinder the process of negotiating. A yield curve that is inverted where short-term debt instruments provide better yields than longer-term bonds is not sustainable. The rising interest rates make it harder to raise money and shift the focus of many businesses away from M&A. Global volatility continues to deter potential buyers.

Another factor that is shaping the future of M&A is the increasing emphasis on ESG (environmental, social and governance) issues. As these issues are incorporated into the strategic agenda of more CEOs, they’re likely to drive M&A which includes acquisitions and divestitures of assets, with www.thisdataroom.com the intention of reducing their ecological footprint.

Lastly to that, the M&A landscape is going through a further transformation as companies search for partners that match their primary business goals. In particular, M&A is expected to continue to grow in areas where supply chain disruptions are accelerating and the need for vertical integration is becoming more pressing. This includes information and communication technology (ICT) and medtech as well as fintech, food manufacturing and automotive industries. Consolidation is also likely to be seen in sectors which have been able to enjoy high valuations because of the rise of startups. This will include sectors like artificial intelligence, augmented reality, telemedicine, and blockchain.