Global M&A deals set to hit $3.5 trillion in 2024
In the world of mergers and acquisitions, 2024 is shaping up to be a standout year. According to Bain & Company, a global management consulting firm, the total deal value is expected to reach an impressive $3.5 trillion by the end of the year. This marks a 15% increase from the previous year and is in line with levels seen in the mid-2010s.
Notably, the increase in dealmaking activity has been driven by both strategic buyers (companies) and financial sponsors (like private equity firms and family offices) across all regions. The energy & natural resources, industrials, and financial services sectors have seen the most action, followed by healthcare and pharmaceuticals.
Despite this overall growth in deal value, the technology sector has not performed as strongly, ending the year below its historical levels. Beyond sector-specific trends, a key factor impacting the number of deals closed is the high valuation expectations gap between buyers and sellers. Sellers are asking for an average multiple of 10.4 times, which buyers feel is too steep, leading to deals stalling.
It’s interesting to note that the drop in interest rates did not result in the full recovery that some had hoped for at the beginning of the year. Even with strong balance sheets and a strategic need for mergers and acquisitions, dealmakers did not see the momentum they expected. As a result, buyers became more selective in their deals, focusing on both revenue and cost synergies to adapt to the new market dynamics.
Overall, successful dealmakers in 2024 have been quick to adapt to market realities, embracing revenue and cost synergies and utilizing new tools like generative AI to enhance the M&A process. By honing their capabilities and staying agile, companies have navigated the challenges of the evolving M&A landscape.
