Global mergers and acquisitions form a vital part of many corporate growth strategies, offering access to new markets, industries customers, products and technologies. They also boost the financial power of a company through greater size and reach. Companies must consider a variety of factors before making international acquisitions or divestitures. These include regulatory, taxation and cultural differences.

In 2024, the challenges of financial markets and uncertain macroeconomic environment weighed heavily on deal activity. However, we expect M&A to increase in the second portion of the year as these headwinds diminish and the results of various elections are known.

M&A can be triggered by strategic objectives such as digital innovation and consolidation. AI and predictive robots and smart factories, for example, are driving manufacturing efficiency in the industrial sector.

One of the most effective strategies is to acquire companies in different geographic markets with similar products or services to expand market reach and customer base. This is my latest blog post vdr-tips.blog/how-to-manage-granular-permissions-for-individual-users-in-vdr/ called market extension. One example of this is when PepsiCo purchased Pizza Hut to significantly boost its soft drink sales.

M&A trends include a shift towards reducing the risk of geopolitical instability, focusing on markets with better prospects, focusing on investing vertically and increasing resilience of the supply chain. Additionally, as the amount of debt and cash available decreases, we expect buyers and sellers to embrace more complex structures in order to bridge valuation gaps, such as stock swaps minor stake sales, earnouts. This could involve using private equity funds to ensure the deal is viable.