Upcoming Deal Trends

L’Oreal announced an agreement in April to purchase the beauty company Aesop. Hewlett Packard Enterprise made a $500 million acquisition of Israeli cloud security company Axis. Energy Transfer, a U.S. midstream company, merged with Lotus Midstream Operations to the tune of $1.45 billion. Some analysts predict that these and similar deals will increase M&A activity in the second quarter of 2023.

But the underlying http://thisdataroom.com/ conditions still hinder deal-making. 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 difficult to raise money and shift the focus of many businesses away from M&A. Global volatility continues to discourage potential buyers.

A growing focus on ESG issues (environmental, Social and Governance) is another factor that will shape the future of M&A. As these issues are incorporated into the strategic agendas of more CEOs they will likely be driving M&A, including the purchase and sale of assets to decrease their environmental footprint.

The M&A landscape is constantly changing as companies seek partners that are closer to the core goals of their businesses. M&A will continue to expand in sectors with disruptions to supply chains that are growing and where vertical integration is needed more than ever. This includes information and communications technology (ICT) medical technology and fintech, food manufacturing, and automotive industries. Additionally consolidation is likely be a common feature in sectors where startup successes have led to high valuations. This includes sectors like artificial intelligence technology, augmented reality and telemedicine and blockchain.