Sep 30, 2024
By: Prerna Tyagi
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In 2023, the global M&A market dropped by 15%, reaching $3.2 trillion—its lowest level in a decade. Buyers and sellers were hesitant, waiting for each other to make the first move, and strategic deals fell by 6%. Explore more such insights, based on Bain’s M&A Report:
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The main challenges? High interest rates, mixed economic signals, regulatory scrutiny, and geopolitical risks. These factors contributed to delayed deals and the lowest deal multiples in a decade.
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While tech M&A dropped significantly, healthcare and life sciences, along with energy and natural resources, experienced a rebound. These sectors drove much of the M&A activity in 2023.
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The biggest obstacle? The valuation gap between what buyers wanted to pay and what sellers expected. This led to stalled negotiations and, in some cases, abandoned deal processes.
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Even with the market slowdown, strategic M&A saw over 27,000 deals valued at $2.4 trillion. Corporate buyers, unlike private equity, had stronger balance sheets, allowing them to proceed with acquisitions.
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Frequent acquirers, those who consistently make deals, continued to outperform their inactive peers in 2023. These companies used M&A to expand their competitive advantage during challenging times.
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Automakers, insurers, and media companies made deals to secure their future. From electric vehicle infrastructure to media consolidation, vertical dealmaking dominated.
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Largescale deals picked up in the second half of 2023, signalling that dealmakers were starting to look beyond the economic downturn and positioning themselves for long-term trends.
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Regulatory bodies across the globe, including the European Commission and the US Department of Justice, increased scrutiny on major mergers, especially in tech and healthcare.
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Despite a tough year, cross-border dealmaking remained resilient. US buyers pursued more international deals, and regions like Brazil and Asia attracted foreign investment.
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The companies that stayed active in M&A, using well-tested strategies, are expected to emerge as industry leaders, reinforcing the benefits of frequent dealmaking.
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