In April, L’Oreal signed a deal to buy beauty brand Aesop. Hewlett Packard Enterprise made a $500 million acquisition of Israeli cloud security company Axis. Also, U.S. midstream company Energy Transfer merged with Lotus Midstream Operations for $1.45 billion. Some analysts predict that these and similar deals will increase M&A activity in the second half of 2023.
But the underlying circumstances slow the process of negotiating. An inverted yield curve – where short-term debt instruments provide better yields than longer-term bonds is unsustainable. The increasing interest rates make it difficult to obtain loans and shift the focus of many businesses away from M&A. Global volatility continues to deter would-be buyers.
Another factor that will influence the future of M&A is a growing emphasis on ESG (environmental social and governance) issues. As these issues are integrated into the strategic plans of more CEOs as they become more prominent, they’re likely drive M&A that involves purchases and divestitures of assets with the aim of reducing their environmental footprint.
Additionally lastly, the M&A landscape is going through a further change as companies seek partners that are closer to their primary business goals. M&A will continue to grow in areas that have supply chain disruptions that http://thisdataroom.com/everything-to-make-an-informed-choice-with-data-rooms-comparison/ are increasing and where vertical integration is required more than ever. This includes the information and communication technology (ICT) as well as manufacturing, food, and automotive industries. Consolidation is also likely to be seen in sectors which have seen high valuations owing to the rise of startups. This will include areas like artificial intelligence and augmented reality, blockchain and telemedicine.
