- BCG's New M&A Sentiment Index Indicates a Stable Global
M&A Market Over the Next Six Months
- Based on Market Indicators and GenAI-Backed Analysis of
Executive and Investor Sentiment, the Index Will Provide Monthly
Insights into Where the M&A Market Is Headed
- Current Momentum Is Strongest in Europe; Dealmakers in the Americas Appear More
Cautious After a Strong Turn of the Year; Dealmakers in
Asia-Pacific Seem Reluctant to Pursue Transactions, as M&A
Activity in the Region Hits a Decade Low
- Across Sectors, Energy Is the Bright Spot for the Remainder of
2024
BOSTON, July 9, 2024
/PRNewswire/ -- The M&A market has been slightly more
active in the first half of 2024 than in the first six months of
2023, but its recovery from last year's trough has been slower than
many anticipated. The global value of M&A activity in the first
half of 2024 was $1.0 trillion, well
below the ten-year average of $1.5
trillion, according to a new article from Boston Consulting
Group (BCG). What's more, BCG's newly launched M&A Sentiment
Index reveals that momentum is not yet accelerating in all
industries and sectors—though dealmakers appear to be more
optimistic now than during the previous 24 months.
The M&A Sentiment Index, which provides a monthly update on
dealmakers' willingness to engage in mergers, acquisitions, and
divestitures over roughly the next six months, indicates a mixed
outlook for dealmaking activity through the end of 2024. Although
the current index value of 78 is below the ten-year average of 100,
the M&A market has already recovered significantly from the low
point of 62 in November 2023.
Regionally, momentum is strongest in Europe; by sector, energy, materials, and
technology, media, and telecommunications are standouts. However,
some dealmakers, especially in Asia-Pacific and in the industrials sector,
seem reluctant to pursue transactions.
"M&A has become part of every CEO's strategy toolkit," said
Jens Kengelbach, BCG's global leader of M&A. "Yet amid economic
uncertainty, concerns about inflation and monetary policy, and
regulatory and geopolitical headwinds, it's harder than ever for
decision makers to formulate reliable plans."
M&A Momentum Is Strongest in Europe; Asia-Pacific Hits a Decade Low
The regional differences during the first six months of 2024
were significant:
- Americas. Deals involving a target in the Americas
had a total value of $647 billion, an
increase of approximately 14% versus the first half of 2023.
Notably, North America accounted
for 61% of overall global M&A activity.
- Europe. The value
of European M&A totaled $255
billion, a 23% increase compared with the first six months
of last year. Deal value in the UK increased by 185%—the country's
highest share of European dealmaking since 2015. Deal value also
increased in Sweden (138%),
Spain (19%), and the Czech Republic (196%), while France (–25%) and Germany (–32%) saw declines.
- Asia-Pacific. Deal
value in Asia-Pacific declined by
40% to an 11-year low of $117
billion. The regional total reflects declines in
Japan (–67%), China (–36%), South
Korea (–16%), and Australia
(–39%). Brighter spots include India (55%), Singapore (41%), and Malaysia (266%).
Drivers for the Remainder of 2024
Many of the trends outlined in BCG's 2023
M&A Report continue to provide support for a positive
outlook for deal activity.
The race to gain access to AI and other emerging technologies
will likely motivate many transactions in the coming years. In
addition, ESG, decarbonization, and the broader energy transition
will lead companies to acquire capabilities, technologies, and
other assets that advance their goals.
The recovery of valuation levels in most sectors presents
another significant tailwind, making it easier for buyers and
sellers to agree on a purchase price. At the same time, volatility
has decreased, yielding a more stable backdrop for decision
making.
Introducing BCG's M&A Sentiment Index
The M&A Sentiment Index uses a proprietary methodology to
derive M&A Sentiment Index value, applying BCG's decades of
M&A research and expertise, as well as insights derived from
analysis of more than 900,000 deals.
To determine the index value each month, BCG will analyze the
fundamental drivers of M&A activity—such as business
confidence, valuation levels, and interest rates—and apply
state-of-the-art generative AI capabilities to assess executive and
investor sentiment toward M&A from corporate
communications.
BCG will refresh the index on the fourth Tuesday of each month.
The index's interactive features allow dealmakers to view sentiment
globally and across individual regions and sectors.
"To understand where the M&A market is heading, CEOs, CFOs,
and business leaders need more than a quarterly or semiannual
snapshot of past deal activity," said Daniel Friedman, BCG's global leader of
Transactions and Integrations. "BCG's monthly M&A Sentiment
Index gives leaders crucial visibility into the M&A market's
near-term trajectory."
Learn more about the M&A Sentiment Index here:
https://www.bcg.com/collections/publications/m-and-a-sentiment-index
Read BCG's latest insights on the state of the M&A market
here:
https://www.bcg.com/publications/2024/m-and-a-market-insights-series-h1-2024
Media Contact:
Eric
Gregoire
+1 617 850 3783
gregoire.eric@bcg.com
About Boston Consulting Group
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SOURCE Boston Consulting Group (BCG)