Global mergers and acquisitions form a vital component of many corporate expansion strategies, giving access to new markets, industries customers, products, and technologies. They also boost financial power through increased the size and reach. However, companies must be mindful of a variety of aspects when deciding on international acquisitions and divestitures, from taxation to regulatory issues to cultural differences.
In 2024, the uncertainties of the capital markets and uncertain macroeconomic situations have weighed heavily on deal activity. However, we expect M&A to increase in the second quarter of the year, as these headwinds lessen and the results of different elections are widely known.
M&A can be triggered by other strategic objectives such as consolidation or digital innovation. AI predictive robots, AI, and smart factories, for instance, are driving manufacturing efficiency in the industrial sector.
To expand the market and increase customer base, it is essential to buy companies offering similar products or services in different geographic markets. This is called market extension. PepsiCo purchased Pizza Hut in order to increase sales of its soft drink.
M&A trends include a shift to mitigate risks to geopolitics and focusing on markets with better prospects, focusing on investing vertically and increasing supply chain resilience. As cash and debt become scarcer buyers are expected to utilize complex structures, like stock exchanges, minor stakes sales and earnouts, to bridge gaps in valuation. This could include the use of private equity funds to make the deal viable.
Betty Wainstock
Sócia-diretora da Ideia Consumer Insights. Pós-doutorado em Comunicação e Cultura pela UFRJ, PHD em Psicologia pela PUC. Temas: Tecnologias, Comunicação e Subjetividade. Graduada em Psicologia pela UFRJ. Especializada em Planejamento de Estudos de Mercado e Geração de Insights de Comunicação.