Riding the M&A Rollercoaster: Will the 2024 Surge Continue?

The mergers and acquisitions (M&A) landscape has experienced significant volatility since the 2008 financial crisis, with 2023 marking the slowest year for M&A activity since 2009. This downturn has largely been driven by rising interest rates and persistent inflation, which have created a challenging environment for deal-making. Several factors have contributed to the fluctuating activity, including economic uncertainty, geopolitical tensions, and shifting regulatory landscapes. The impact of these elements has been profound, influencing both the volume and value of deals globally.

In 2023, the total value of M&A transactions fell by a notable margin compared to the previous year, reflecting a cautious approach by companies in the face of macroeconomic headwinds. According to Deloitte’s M&A trends report, high interest rates have significantly increased the cost of borrowing, making it more expensive for companies to finance acquisitions. Additionally, inflationary pressures have squeezed profit margins, leading many firms to delay or cancel planned deals.

The economic environment in 2023 was marked by uncertainty, with central banks around the world raising interest rates to combat inflation. This had a direct impact on the availability and cost of capital, which are critical factors in the M&A market. As financing conditions tightened, both strategic and financial buyers faced greater scrutiny in securing funding for deals. The result was a more selective approach to acquisitions, with a focus on high-quality assets and strategic fit over opportunistic buys.

Despite these challenges, there are reasons for optimism as we look towards the second half of 2024. Dealmakers are showing resilience and adaptability, adjusting their strategies to navigate the complex economic landscape. Innovations in deal structures, such as earn-outs and contingent payments, are becoming more common as a way to bridge valuation gaps and mitigate risk. Moreover, the presence of substantial “dry powder” – capital reserves held by private equity firms – suggests that there is a strong underlying appetite for M&A activity once market conditions stabilize.

As companies continue to seek growth and competitive advantage through acquisitions, the M&A landscape is poised for potential recovery. The key drivers of this recovery include ongoing digital transformation, the push for sustainability, and the need for supply chain resilience. By focusing on strategic acquisitions that align with these themes, companies can position themselves to capitalize on the opportunities that arise in a more stable economic environment.

Are People Looking at More M&A Opportunities Today?

Despite the recent slowdown, interest in M&A opportunities remains robust. According to Deloitte’s 2024 M&A Trends Survey, a significant number of corporate and private equity leaders are actively pursuing deals, driven by the need to innovate and adapt to new market realities. The survey highlights that nearly two-thirds of respondents are optimistic about deal-making in the coming year, suggesting a potential uptick in activity.

Do We Think M&A Activity is Getting Better?

The outlook for M&A activity in the second half 2024 appears cautiously optimistic after a very slow start to the year. The Deloitte survey indicates that while 2023 faced headwinds, such as economic uncertainty and valuation challenges, many dealmakers are adjusting their strategies to navigate these obstacles. Key trends, including the energy transition and the adoption of disruptive technologies, are expected to drive deal-making as companies seek to enhance their competitive edge and achieve growth through acquisitions.

What Do People Think the Driving Forces in M&A Are Today?

Several factors are currently influencing the M&A market. One of the primary drivers is the shift towards sustainability and energy efficiency. Companies are increasingly seeking acquisitions that will help them reduce their carbon footprint and meet environmental, social, and governance (ESG) goals. Additionally, the rapid pace of technological advancements is prompting businesses to acquire innovative companies that can provide a technological edge. Supply chain restructuring and the need for greater resilience in operations are also key motivators for M&A activity.

How Are Capital Markets and Access to Funding Sources Impacting the M&A Markets?

The capital markets have played a dual role in shaping M&A activity. On one hand, the influx of capital into private credit markets has provided borrowers with a variety of flexible financing options, supporting high levels of leverage and enabling deal-making. However, the recent rise in interest rates has made financing more expensive and reduced debt capacity, leading to a more cautious approach among lenders. Despite these challenges, there remains a substantial amount of “dry powder” in the market, indicating that funding is available for well-structured deals.


As we move into the second half of 2024, the M&A market stands at a crossroads. While 2023 was marked by significant challenges, the resilience and adaptability of dealmakers suggest that the coming year could see a resurgence in activity. By focusing on strategic acquisitions that align with sustainability goals, technological advancements, and supply chain resilience, companies can navigate the complexities of the current economic landscape and capitalize on emerging opportunities. Buckle up for a turbulent second half of 2024 – and remember, when the M&A rollercoaster gets wild, choose a partner who knows how to help you ride the ups and downs smoothly and successfully.

The upcoming months will likely see a shift in how deals are structured and executed, with greater emphasis on innovative financing solutions and strategic alignment. Companies that can effectively leverage their strengths and adapt to changing market conditions will be well-positioned to take advantage of the renewed M&A activity. Moreover, the continued evolution of industries, driven by digital transformation and ESG considerations, will create new avenues for growth and collaboration. With careful planning and a focus on long-term value creation, 2024 holds the potential for a robust recovery in the M&A market, offering exciting prospects for companies and investors alike.