After high interest rates and regulatory scrutiny kept some corporate leaders from making deals in 2023, executives and analysts are expectiꦜng a rebound in mergers & acquisition (M&A) activ𒁃ity this year. 

A Deloitte survey showed that 83% of corporate and private equity leaders expected an increase in 澳洲幸运5官方开奖结果体彩网:mergers and acquisitions (M&A) this year, with almost as many responding that they expect the volume of their own organizations' deal-making to grow.

The executive sentiment recorded by Deloitte lines up with a forecast from Morgan Stanley Investment Banking that concluded M&A activity was positioned to increase in 2024 after sinking in 2023 as inflation, high interest rates and 澳洲幸运5官方开奖结果体彩网:increased regulatory scrutiny all contributed to stifle deal-making last year.

Data from FactSet showed M&A activity was down 14.1% in December from the prior month, although spending on deals jumped more than 40% in the month. Only four of 21 tracked sectors had year-over-year M&A growth during the year’s fourth quarter, the report said.

澳洲幸运5官方开奖结果体彩网:M&A activity can be benꦿeficial for investors by either pressing the share price higher for companies that are acquired, or by quickly adding scale, volume, or 澳洲幸运5官方开奖结果体彩网:market share to corporations that take ꦓover smaller companies. 

‘Dry Powder,♕’ Lower Interest Rates Could Spur Deal-making

Deal-making activity has slowed over the past two years, falling to a volume of $2.4 trillion in 2023, down more than 50% from 2021 and lower than the average of $2.9 trillion between 2006 and 2020, Morgan Stanley reported. 

But, as the Deloitte survey indicated, the deal-making environment is set to pick up in 2024, with Morgan Stanley referencing $1.9 trillion in private equity “澳洲幸运5官方开奖结果体彩网:dry powder” that can be deployed toward M&A activity. Additionally, deals will be easier to finance if the Federal Reserve follows through on 澳洲幸运5官方开奖结果体彩网:anticipated interest rate cuts ෴this year.  

Sectors In Focus For M&A Activity in 2024

Morgan Stanley pinpointed three sectors where more corporate deals could be coming. Energy was one sector with notable activity in 2023, such as 澳洲幸运5官方开奖结果体彩网:𒊎Chevron Corp.🏅’s acquisition of Hess Corp.,  and companies in this industry seem se𝔉t for more deal-making this year. 

“Energy companies had very strong operating cash flows and balance sheets for a number of years, and they are tactically trying to broaden portfolios incrementally,” John Collins, Morgan Stanley's head of global M&A, said. 

More deals in the 澳洲幸运5官方开奖结果体彩网:technology sector could be spurred when b💃uyers and sellers get closer on valuations, while biotechnology companies looking for research opportunities could drive M&A activity in the health🅰-care sector.

One area on which respondents to the Deloitte survey agreed was the role that advanced analytics and generative artificial in👍telligence (AI) would play in future deal-making activity, with 99% confirming that their organizations are using the technology for tasks like valuation, integration, and divestitures.