Upcoming Deal Trends

23 Oct Upcoming Deal Trends

L’Oreal announced a deal in April to purchase the beauty company Aesop. Hewlett Packard Enterprise acquired Israeli cloud security firm Axis for $500 million. Energy Transfer, a U.S. midstream firm, has merged with Lotus Midstream Operations to the amount of $1.45 billion. The consensus is that these and other deals that will be announced in the second quarter of 2023 will spur M&A activity.

However, the underlying conditions are slowing the process of making deals. Inversion of the yield curve, where short-term debt instruments are more profitable than http://thisdataroom.com/everything-to-make-an-informed-choice-with-data-rooms-comparison longer-term bonds is not sustainable. Inflation is rising, making it unattractive to borrow money and are shifting the focus of a lot of companies to internal initiatives, instead of M&A. Global volatility continues to deter would-be buyers.

A growing attention to ESG issues (environmental Social and Governance) is another factor that will influence future M&A. As these issues are integrated into the strategic plans of more CEOs and directors, they’re likely to be driving M&A which includes acquisitions and divestitures of assets with the goal of lowering their ecological footprint.

Additionally lastly, the M&A landscape is going through a further transformation as companies search for partners that align with their core business purpose. Particularly, M&A is expected to increase in the areas where disruptions to supply chains are increasing and the need for vertical integration is growing more urgent. This will include the information and communication technology (ICT), manufacturing, food, and automotive industries. In addition consolidation is likely continue in areas where startups’ successes have led to high valuations. This will include sectors like artificial intelligence, augmented realities, telemedicine, and blockchain.