Global mergers and acquisitions are a critical element of many expansion strategies, giving access to new markets, industries customers, products, and technologies. They also boost the financial strength of companies through increased scope and impact. Businesses must consider a wide range of factors before making international acquisitions or divestitures. These include regulatory, taxation, and cultural differences.
In 2024 the uncertainty of the capital markets as well as uncertain macroeconomic conditions weighed down deal activity. However we expect M&A to increase in the second half of the year as these headwinds lessen and the results of different elections are public.
M&A can be driven by other strategic goals, such as digital innovation or consolidation. AI robotics, predictive robots and smart factories, for instance are boosting manufacturing efficiency in the industrial sector.
To expand the market and expand the customer base, it is essential to acquire companies with similar products or service across different geographical markets. This is referred to as market extension. PepsiCo purchased Pizza Hut in order to increase its sales of soft drinks.
M&A trends include a shift to reduce increased geopolitical risk, focusing on markets with better prospects, investing in vertically, and improving the resilience of supply chains. As cash and debt become more scarce buyers are expected to utilize complex structures, including stock exchanges, minor stakes sales and earnouts to bridge valuation gaps. This may include using private equity investment funds to make the deals work.
http://www.vdr-tips.blog/how-much-does-a-merger-and-acquisition-cost/
