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Mergers and acquisitions (M&A) market outlook 2024

Your latest deals market update

We provide regular Deloitte mergers and acquisitions updates on the UK M&A market, covering industry M&A outlooks, deals trends and hot topic insights. Through videos and articles, we look at how themes, such as interest rates, consolidation, and the Energy Transition, are impacting M&A activity.

In our latest update, we look at global M&A trends by comparing 2023 deal data to 2024. While 2024 has so far seen subdued global deal volumes, average deal values have increased due to the return of mega deals, especially in the corporate sector. With the pricing gap now decreasing, we expect an increase in M&A activity in 2024. We examine what we can expect across industries, the role of Private Equity in driving deals and the impact of themes such as cross-border M&A.

Watch our Summer 2024 macro perspective video

Gurm Dhillon, UK M&A Leader, looks at the latest M&A deal activity and delves into what we can expect for the remainder of 2024. He examines key trends across industries from UK fibre players consolidating, to continuing portfolio rationalisation in the Consumer industry. Gurm also looks at how Private Equity will focus on portfolio value creation through transformation, as well as portfolio mergers and acquisitions to achieve their exit returns.

Read transcript

Hi, I'm Gurm Dhillon and welcome to our summer 2024 M&A market outlook.

00:16-00:49 – Deal volumes and values analysis

The start of 2024 has seen month on month declines in Global deal volumes. Although, encouragingly we saw average deal values moving in the opposite direction, driven by the return of a number of mega deals, particularly in the corporate space.

Deal volumes have remained dampened by the continued gap in pricing between buyers and sellers. However, many of the factors that were burdening valuations such as high inflation, interest rate volatility and inability to pass on price increases to end consumers have stabilised. We now see that pricing gap reducing.

00:50-01:54 – What M&A activity can we expect for the rest of 2024?

Whilst geopolitical factors, including upcoming elections in a number of markets, may cause some uncertainty and the impact of the emergence of AI-driven M&A is still unclear, M&A is again being seen by Management teams as a core strategic option after an extended period of focussing on cutting costs and building up cash.

We therefore see a pickup in deal volumes over the remainder of 2024. Themes across all industries are continued simplification of business models, more cross border M&A activity and deals with value creation at their core.

Significantly, Deloitte’s 2024 Divestitures Survey shows that 78% of corporate business leaders are considering at least three divestments in the coming year, which is nearly double that of the 2022 survey.

We also expect to see a return of PE sponsors to the deal environment, both selling and buying. But, we do expect the shape of those deals to vary including structured equity or minority investments alongside traditional control deals. Do look out for our follow-on M&A perspectives video on PE divestments later this summer.

01:55-03:55 – M&A activity predications by industry

So, let’s take a look forward by industry into the rest of 2024…

In Tech, Media and Telco, further M&A is expected in data centres and European telecoms operators. UK fibre players are likely to consolidate, media dealmaking will pick up from last year’s lows, and we anticipate tech deals to increase in the second half of this year.

For the Consumer industry, the prominent trends are premiumisation and wellness, particularly industries aligned to these which include VMS, skin and beauty, and wider consumer health. We expect consolidation in the Consumer health and beverage sectors, along with continuing portfolio rationalisation.

In Energy, Resources, and Infrastructure we’ve seen limited activity in the UK's Oil & Gas industry. But, global consolidation plays, particularly in the acquisition of reserves, are expected to continue.

Power and utilities will be looking to invest their capital, and this is likely to be deployed on energy transition opportunities. M&A is likely to be focused downstream on customer-facing service networks.

In Financial Services specialist niche banks continue to be sub-scale but attractive for their higher margins. It’s likely that we’ll see consolidation among ‘challenger banks’ as they strive to achieve scale. We expect to see more ‘non-core’ disposals from banks and insurers to improve returns and leverage capital for growth.

There are continued opportunities for inorganic growth and portfolio reshaping in Life Sciences and Healthcare. There is obvious cross over with the Consumer industry in the Consumer health space. In pharmaceutical there will be a move towards more personalised therapies and selected IP and pipeline molecule acquisitions by the super-pharmas.

And finally Private Equity will continue to double down on Portfolio value creation through transformation and portfolio M&A to achieve their exit returns. Tech, FinTech, and Healthcare will remain active for new Private Equity deals, and Energy and Cleantech are also likely to attract increased focus.

03:56-04:10 – Conclusion

Whilst an increase in deal activity seems inevitable, prospective deals will take longer to execute as they continue to attract heightened scrutiny by boards, investment committees and lenders.

However, optimism does now prevail.

Private Equity outlook video coming soon

Read our previous sustainability & climate M&A market outlook insights | Winter 2023

The energy transition presents attractive investment opportunities | Winter 2023

Helen McLeod, Director, and Rachel Hyde, Manager, look at how organisations are responding to M&A investment opportunities created by the energy transition. They examine emerging themes, such as clean energy systems and, electrification and energy efficiency. They discuss an expected increase in competition for high-quality, ‘green’ assets, which may push up valuations and multiples on future M&A deals.

Responding to stranded asset risk with M&A | Winter 2023

Poppy Harris, Assistant Director, and Philip Parnell, Partner, examine the types of stranded asset risks organisations should consider. They look at the challenges and opportunities these present, and how these can be used to unlock M&A. For example, they predict that more assets will be repurposed to meet evolving systemic challenges because of stranding risks, and this is likely to provide M&A opportunities.

Consumer | Q2 2023 update

Amidst the uncertain macroeconomic environment, Donatella De Ieso - Consumer Origination, analyses how shifting consumer habits are affecting business growth and M&A strategies for Consumer Packaged Goods companies. This includes investing in direct-to-consumer models and acquiring small, digital native companies.

ER&I and the Energy Transition | Q2 2023 update

Charlie Smith - Transaction Services Director, examines how the Energy Transition is influencing M&A activity. Charlie considers how changes to multiple windfall taxes and levies is affecting investor confidence, and why the need to decarbonise and make supply chains more sustainable is seeing M&A activity increase across ER&I corporates.

FS | Q2 2023 update

Transaction Services’ Director Clodagh Mullins and Partner Simon Thompson look at how debt costs have affected valuations and deal flow in recent months. They also examine how the current market environment has impacted larger banks, while discussing key FS M&A drivers for Q2 deal activity and the rest of the year.

LS&HC | Q2 2023 update

LS&HC M&A Partners Amar Shah and Brett Enghdahl analyse the current M&A market conditions and what deal activity we can expect from LS&HC businesses in Q2 2023 and beyond. Amar and Brett also consider the key M&A activity drivers, including portfolio optimisation and rationalisation.

Media & Telecoms | Q2 2023 update

Despite a challenging external environment, TMT M&A Partners Charlotte Perfect and David Hoare discuss how strong structural drivers, such as consolidation, digitalisation and inflation, are impacting M&A deal activity. They look at what we can expect from the rest of 2023.

Deloitte’s outlook for sports investment in 2023

With more than 200 M&A transactions completed in the sports sector in 2022, Deloitte's Sports M&A Advisory practice sets out why further investor interest will be drawn to sport in 2023 and the assets that will pique interest.

FS | Q1 2023 update

With the FS sector accounting for almost 17% of all global and European M&A transactions, David Lock - Head of Bank M&A Strategy, and Jonathan Gold - Head of EMEA Financial Institutions Group, discuss three main themes driving M&A deals into 2023.

Energy & Resources | Q1 2023 update

Jonathan Hughes - Energy, Resources & Industrials M&A Partner, discusses two main themes that dominate the energy landscape - energy security and commodity prices, alongside climate change and energy transition. Jonathan discusses how these will affect M&A activity in 2023.

TMT | Q1 2023 update

After a year with challenging macro factors, TMT M&A Partners Duncan Down and Charlotte Perfect, highlight what limitations TMT dealmakers could face in 2023 and which markets are likely to recover and grow the quickest.

Watch our previous video updates using our YouTube playlist | 2022 and 2023

What happened in the M&A market in 2022 and 2023? With ongoing market uncertainty, our updates over the last 18 months offer macro perspectives on the market and discuss key M&A trends and drivers of deal activity across sectors, including Consumer, FS, and TMT.