M&As Expected To Emerge As a Crucial Strategy In 2024 A recent report also says that merger and acquisition momentum is expected to remain steady in 2024 and beyond
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Despite global economic and geopolitical challenges, India's deals market is expected to remain steady, reflecting strong confidence from businesses and investors amidst a global economic slowdown, according to a recent report by Deloitte.
It adds that amidst significant global challenges posed by high interest rates, macroeconomic uncertainty, regulatory scrutiny, and geopolitical risks, India's mergers and acquisition (M&A) landscape stood resilient in 2023.
M&A momentum in 2024 and beyond
According to the report, the manufacturing sector, driven by automotive, is expected to spur the M&A activity with deal growth expected in auto-components and Electric Vehicles (EVs). "The government's proactive initiatives to promote clean energy are expected to catalyze a significant rise in M&A within the energy sector. M&A in the FS sector is anticipated to be driven by large-scale consolidations and responses to regulatory shifts," it says.
Further, PE is projected to remain consistent in 2024, while deal momentum is expected to revive post-2024, supported by flattening interest rates and recovering economic growth.
"The global challenges posed by high interest rates, macroeconomic uncertainty and geopolitical risks, that characterized 2023 are expected to continue into 2024 as well. While the global M&A market remains soft, Indian companies continue to be steered by a strong domestic economy. They may increasingly see M&A as a crucial strategy to help them expand, integrate supply chains and reinforce market positions," said Sumeet Salwan, Partner, Consulting, Deloitte India.
M&As in 2023
According to the report, M&A deal value in India reduced to US$136 billion in 2023 from US$186 billion in 2022. Financial Services and Technology, Media & Telecom (TMT) continues to be the top sectors driving M&A. Financial Services sector witnessed a 45 percent decline in deal value and 23% increase in deal volume from 2022. TMT sector encountered a 33 percent YoY reduction in deal value, while deal volume fell by 34 percent, it said.
It also added that overall cross-border deal value declined by 11% in 2023. However, Inbound deals saw significant growth, with their share increasing to 41 percent from 27 percent in 2022. Conversely, outbound M&A deal value experienced a notable 49% decline compared to 2022.
