With or without you? This is the question not only U2 but CEOs globally will surely be asking themselves these days, as they hunt for more shareholder value creation. With markets moving from strength to strength, the global economy showing renewed confidence and companies sitting on a pile of cash with buybacks/dividends proceeding at full steam, M&A seems to be the way to go for further long-term value generation. Better ‘with you’ then?
We have done an extensive analysis of where M&A is more likely based on: (i) recent post-COVID M&A volumes; and (ii) sector valuation dispersion. In this respect, we expect upcoming M&A to occur mostly in Technology, Communications, Consumer Non-Cyclicals and Basic Materials.
While M&A activity does seem to be picking up globally and the US will remain the ‘M&A king’, we expect a big jump in Europe, with recent activity levels particularly shy. M&A is definitely a cyclical business, but the main indicators point to a revamp in M&A activity already in 2024 and a bright outlook beyond.