In an uncertain market, leaders are making bold moves that will define the future. The same goes for experienced dealmakers. What are some key trends for the months to come? Cash-rich companies make strategic, bold moves In a strong market position, companies with ample cash and debt capacity will have the upper hand to execute transactions. Energy, industrials, and technology are just a few of the sectors in which top players are poised to make bold moves. A balance of scale and scope deals In the current economic environment, assets with cash flow and a clear path to synergies are in high demand, leading to a shift towards scale deals. At the same time, the desire to adopt buy-and-build to grow businesses through M&A remains strong. Portfolios reshape through separation and divestitures Uncertain times often lead to re-evaluation of corporate portfolios, resulting in an increase in divestiture activity. Divestitures can help fund new investments, unlock capital, and refocus leadership. Expect to see the most activity in sectors undergoing transition, such as the shift to renewables in energy and the automobile industries. Due diligence will improve Enforced pauses in activity for less well-capitalised PE firms will bring down deal volumes. This reduces competitive tension and pressure to complete deals quickly. Transaction teams can focus on due diligence, resulting in well-checked deals. In 2023, savvy leaders will keep their feet on their M&A accelerators, even as competitors slam on the brakes in the face of turbulence.
