The Big Picture: 2024 M&A Industry Outlook

A look ahead to the key strategic trends expected to drive the 2024 M&A outlook

M&A activity has remained slow through most of 2023, but various catalysts have the potential to start encouraging dealmakers to come off the sidelines in 2024. Potential stability in rates, pent-up demand and pushes to consolidate or divest in certain industries may drive an uptick in the outlook for M&A activity.

The extremely small number of transactions in 2023 will make year-over-year M&A comparisons in 2024 easy to surpass, but large deals will continue to face hurdles, especially in the US where antitrust concerns have been a focus of regulators.

• Getting private equity back in the game
  Private equity firms often rely on leverage for deals, and greater comfort with the industry outlook for the debt markets should entice financial sponsors to get back into the M&A game.
• Exit strategies
  A lack of exit opportunities has also factored in the dealmaking slowdown for private equity. Signs of life in the IPO market would improve fundraising prospects as it would give private equity another pathway to exit investments from portfolio companies.
• AI a possible tech M&A solution
  A more cautious attitude toward dealmaking should continue into 2024, but the new year will benefit from a release in pent-up activity. Several subsectors do have the potential to see gains, including technology that offers productivity and efficiency gains, including industrial automation and decision intelligence platforms.
• Potential drivers and hurdles to M&A growth
  Deal activity has been at such lows that many sectors should start seeing some increased M&A activity in 2024. Greater clarity in the economic outlook and the end of the rate-hiking cycle would foster more M&A growth, while antitrust scrutiny remains a potential barrier.