Mergers & acquisitions make a comeback in 2024, up 13.5% till November
- IBEF
- December 9, 2024
Investment bankers are expected to go home with hefty bonus cheques in 2024 with merger and acquisition (M&A) deals rising 13.5% year on year to US$ 88.9 billion in the first eleven months of the year, according to Bloomberg data. Bankers expect 2025 to be another record year as healthy economic growth, technological advancements, and the deployment of "dry powder" (unallocated cash) by private equities create a conducive environment for deal-making. Deal activity in 2025 is expected to remain strong, building on the momentum gained in 2024 due to stable interest rates, slowing inflation, and abundant investment capital available in the form of dry powder with private and public funds. The favourable conditions continue to encourage companies to pursue growth, particularly through digital transformation and strategic acquisitions.
In 2024, deal volume increased 25.9% to 2,811 transactions in the first eleven months of the year, compared with 2,232 transactions for the corresponding previous year. M&A deals generally slow down considerably in the last weeks of a year due to the Christmas holidays. According to Bloomberg data, the largest transactions of the year include the merger of Quality Care India and Aster DM Healthcare valued at US$ 5.08 billion, followed by Bharti Enterprises’ acquisition of a 24.5% stake in the BT Group at US$ 4.08 billion, and a family settlement transaction in the Godrej family at US$ 3.5 billion.
The trends from 2024 suggest that early-stage investments and smaller ticket-size deals will persist, but as capital becomes cheaper, larger deals are likely to make an appearance. Key sectors driving this activity include manufacturing, consumer goods, IT, pharma, healthcare, and real estate. Additionally, financial services is expected to see growth, driven by both investment needs and consolidation. Capital markets were expected to remain buoyant, and with interest rates expected to decrease, there could be more liquidity flowing into the markets. This, however, may lead to limited opportunities for M&A and private equity (PE) investments.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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