When it comes to the latest M&A trend, business leaders expect to see a rebound into 2024, according to EY.
According to findings of the latest EY CEO Outlook Pulse survey, nearly all (98%) of CEOs expect to actively pursue a strategic transaction in the next 12 months, up from 89% in January 2023.
In addition, 59% of respondents look to M&A, while 47% look to divest and 63% look to enter strategic alliances or joint ventures, survey results indicated.
The appetite to acquire is close to a record high but barriers to doing deals in the current market such increasing regulation and a higher cost of capital will likely temper many of these plans, EY pointed out.
- Improving technology capabilities and innovation is a primary driver of the M&A trend, with 16% of respondents stating that this a primary investment goal.
- Another major M&A trend is business leaders’ incorporating AI in M&A strategies. CEOs surveyed are leveraging these technologies in their deal sourcing and processing.
- 71% are incorporating AI into the transaction process, either significantly or through pilot programs.
- Only a tiny cohort (5%) have no plans to use AI — and they risk being outmanoeuvred by the competition.
Despite economic headwinds, accelerating technology innovation and continued disruption, CEOs want to get on the offensive and many are looking at deals to make that happen, said Andrea Guerzoni, EY Global Vice Chair – Strategy and Transactions.
“The future of M&A dealmaking means significantly more information needs to be captured, processed, analyzed, and interpreted than ever before,” she noted. “Traditional means are no longer effective in delivering a competitive edge. AI capabilities, deployed correctly, may be the key to unlocking even more value through M&A.”