The Future of the Merger and Acquisition Market

The mergers and acquisitions market is strong, with current M&A patterns predicting an impending run. But it doesn’t guarantee next year won’t be difficult. Discover in this article how to foresee roadblocks, adapt to changing regulations, and reinvent your M&A strategy.

M&A leaders who adapt, anticipate, and innovate are delivering clear and strong signals to businesses that deal-making activities (such as acquisitions, divestitures, and alternative M&A strategies) will provide essential resources as they navigate regulatory and economic change.

Important discoveries

Today’s M&A activity consists of more than merely purchases. Asset sales are also on the rise, and more CEOs say they are open to new approaches.

  • Over the next 12 months, 92 percent of respondents predict deal volume to rise or remain constant.
  • In the last 12 months, 57 percent of corporate respondents had divested.
  • A divestiture is being considered by 32% of company respondents.

Challenges and solutions are always developing

Corporate strategy, M&A strategy, and operational model constraints continue to cross in various ways. According to executives, one of the difficulties is bringing these factors together into a cohesive strategy. However, new technologies are available to assist: digitally enabled, virtual, and hybrid M&A process management is more common than ever.

Interest in international business is also growing. As they scramble to beat the adoption of more difficult hurdles

  • 54 percent of responding dealmakers believe the tighter regulatory environment will stimulate greater deal activity
  • 68 percent said they will be more interested in foreign deals in the following year.

Transformation and reorganization

Companies are striving for greater transformational change, with many focusing on delivering that transformation during the transaction.

  • Since the beginning of the epidemic, over half of the enterprises examined had reorganized.
  • 44 percent are thinking about restructuring in the next 12 months.
  • Almost two-thirds (63%) of respondents said that a successful transformation is relatively or strongly dependent on the performance of their M&A activities.
  • While their transactions are ongoing, 34% of the organizations polled said they are conducting transformative restructuring.

M&A is looking ahead

Dealmakers continue to explore innovative approaches to get the job done as transaction activity and volume remain strong. Data and analytics skills are making inroads into procedures such as investigation and monitoring.

  • 69 percent of respondents said they are now employing data analytics in their diligence and monitoring.
  • 27 percent are thinking about increasing those skills.

Digital tools and virtual environments are becoming more prevalent in M&A transactions, with mutually reinforcing impacts that have the ability to accelerate and change the process.

Be a two-way player

Many organizations approach M&A strategy through the perspective of offensive and defensive methods, depending on the degree of pressure they are under and the amount of room they have to act. Evaluating actions in this manner can assist a corporation in determining if it needs to defend its current position, seek gains, or pursue revolutionary advancement. Respondents reported that their firms are implementing more offensive measures this year.