Louisiana M&A Activity Declines for Second Year

Louisiana Merger & Acquisition Activity Declines for Second Year in a Row

Louisiana has experienced a decline in merger and acquisition activity for the second consecutive year. In 2024, there were 171 transactions involving a Louisiana target, buyer, or seller, showing an 8.6% decrease from the previous year. This drop continues a trend from 2023 when there were 187 transactions, and 2022 when Louisiana saw 208 deals.

Interestingly, this decline in Louisiana stands in contrast to the broader U.S. market, which experienced a 7% rise in deals over $30 million in value from 2023 to 2024, as reported by Dealogic. The increased cost of capital, stemming from the Federal Reserve’s efforts to combat inflation through rate increases, has significantly impacted M&A activity since 2022, continuing into 2024.

Geopolitical instability, compounded by uncertainty surrounding the U.S. election, also played a role in shaping the M&A landscape in 2024. However, with a more stable economy on the horizon for 2025, marked by solid growth and easing inflation, there is optimism that M&A activity will gain momentum.

In 2024, Louisiana saw only two transactions exceeding $1 billion in value, both driven by Bernhard Capital Partners, along with just 29 deals with disclosed values. Recently, Bernhard Capital has pursued acquisitions in the utilities industry, securing deals like the acquisition of New Mexico Gas Company Inc. for $1.25 billion in August 2024.

Looking ahead to 2025, the U.S. M&A market shows promising signs of growth, buoyed by lower interest rates, improved financing conditions, and the easing of economic uncertainty post-election. Both corporations and private equity firms have substantial capital waiting to be deployed, further supporting an optimistic outlook for M&A activity in the coming year.

While new trade policies and regulatory changes may present challenges in 2025, the general sentiment points towards increased deal-making as the economy stabilizes and uncertainties diminish. Buyers and sellers alike must navigate these changing dynamics to ensure successful outcomes in negotiations and transactions.