L’Oreal announced the signing of a deal in April. buy the click over here beauty brand Aesop. Hewlett Packard Enterprise acquired Israeli cloud security company Axis for $500 million. Energy Transfer, a U.S. midstream firm, merged with Lotus Midstream Operations to the amount of $1.45 billion. The analysts predict that these and other deals will boost M&A activity in the second quarter of 2023.
But the underlying circumstances slow down the process of negotiating. An inverted yield curve – where short-term debt instruments provide higher yields than bonds with longer maturities is unsustainable. The increasing interest rates make it difficult to raise money and shift the focus of a lot of 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 focus on ESG (environmental social, societal and governance) issues. As these issues are included in the agendas of more CEOs they will likely be driving M&A, including the purchase and sale of assets to decrease their environmental footprint.
In the final analysis, the M&A landscape is going through a further change as companies seek partners that are more aligned with their core business objectives. M&A will continue to expand in industries that experience disruptions to supply chains which are increasing, and where vertical integration is needed more than ever. This will include information and communications technology (ICT) as well as medtech as well as fintech, food manufacturing, and the automotive industry. Consolidation is also expected to continue in areas which have seen high valuations due to the success of startups. This will include sectors such as artificial intelligence and augmented reality, telemedicine and blockchain.