S&P Global – Big Picture M&A, 2024

Recent years have seen sluggish M&A activity, primarily due to a rising interest rate environment. Higher financing costs and lower equity prices have made deals less attractive and reduced investor confidence. However, a report suggests that if the Federal Reserve ends its hiking cycle, it could improve the outlook for M&A. A steady rate environment, even with high rates, can provide more clarity for buyers and increase their confidence to pursue acquisitions. Furthermore, there is pent-up demand for dealmaking, with continued interest from clients in acquisitions. Sectors like pharmaceutical and oil and gas have already seen significant transactions, driven by cash-rich buyers, indicating potential for increased dealmaking in the coming year. Overall, the report predicts an uptick in M&A activity in 2024, fueled by a stable rate environment and pent-up demand.